Vedanta raises Rs 1,000 crore from IDBI Bank, Canara Bank

raised Rs 1,000 crore from IDBI Bank and Canara Bank last week for three years at 7.68% to repay existing debt and for general corporate purposes, people aware of the matter said.

Of the Rs 1,000 crore which were raised in the form of secured bonds maturing 31 December 2024, both banks subscribed to Rs 500 crore each.

The 7.68% pricing of the three-year AA-rated paper by Crisil is currently 239 basis points over the yield on sovereign bonds of the equivalent tenor.

The Mumbai based commodities maker has rupee-denominated repayments of Rs 1,750 crore which include Rs 1,250 crore to State Bank of India and Rs 500 crore IndusInd Bank before the end of March 31, 2022, people said.

In response to queries by ET, Vedanta confirmed fundraising but did not comment on investors.

Anil Agarwal, promoter of Vedanta Ltd hit the headlines when it announced restructuring plans in mid-November. The company proposed that it would demerge its aluminium, iron & steel, and oil and gas businesses as standalone entities and list them separately.

The company stated that it has set up a committee to review the current corporate structure and evaluate the possibility of demergers, spin-offs and strategic partnerships to unlock value and simplify its corporate structure.

Some analysts see this move as a U-turn from its previous plan of taking Vedanta Ltd private. The holding companies of Vedanta have been hiking stake through open market purchases after a failed attempt at share buyback in October 2020.

Within days of announcing a demerger plan, the company informed the exchange that the holding companies have pledged 65.18% of their stake in Vedanta Ltd to raise three debt facilities totalling USD 800mn from Standard Chartered Bank. The USD 400mn debt facilities were raised by Twin-Star Holdings, USD 150mn was raised by Vedanta Netherlands Investments BV and USD 250mn was raised by Vedanta Resources.

Vedanta Ltd has non-current liabilities of Rs 22,609 crore and current liabilities of Rs 7,853 crore as of September 30, 2021, according to stock exchange disclosures. It reported net sales of Rs 30,401 crore.

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