Goldman, Morgan Stanley among top investors in $1 billion Vedanta QIP

Mining conglomerate Vedanta Limited raised Rs 8,500 crore (over USD 1 billion) through Qualified Institutions Placement (QIP) of 19.31 crore equity shares at an issue price of Rs 440 per share, according to a stock exchange filing by the company.

The issue, which closed on July 19, implied a discount of 4.61 per cent to the floor price of Rs 461.26 per equity share.

In a stock exchange filing, Vedanta said it sold 19.31 crore shares to raise Rs 8,500 crore.

Some of the marquee investors that have been allotted equity shares through the QIP include Abu Dhabi Investment Authority (ADIA), Goldman Sachs AMC, Nippon Mutual Fund, SBI Mutual Fund, UTI Mutual Fund, ICICI Mutual Fund, Aditya Birla Mutual Fund and Mirae Mutual Fund.

Various funds run by Nippon Mutual Fund were allotted 9.11 per cent of the total issue size, while funds managed by Morgan Stanley and SBI Mutual Fund received 8.62 per cent and 7.88 per cent, respectively.

Speaking on the occasion, Vedanta chairman Anil Agarwal, in a press release, said, "The overwhelming response to the Vedanta QIP underscores the huge confidence that the global investor community has in Vedanta - our unique set of irreplaceable world-leading assets, our quest for operational and cost excellence, and the solidity of our strategic future growth projects.

"We remain closely aligned with the goals of ensuring India's self-reliance and security in the area of critical minerals and energy while contributing significantly to the nation's economic prosperity and the creation of shareholder value." The QIP witnessed significant interest from foreign institutional investors (FIIs), mutual funds, insurance companies and other investors. Vedanta's Committee of Directors authorised the opening date of QIP on July 15, 2024, with a floor price of Rs 461.26 per share for this issue.

As per the company's press release, the proceeds from the QIP will be used to continue to de-leverage Vedanta Limited's balance sheet and help deliver the company's USD 10 billion EBITDA targets in the near term.

The mining major has various projects under execution, having high potential for increasing volume, business integration, and enhancing the range of value-added products across its businesses. These growth projects will be the key drivers to Vedanta's near-term EBITDA target of USD 10 billion.

These include an aluminium smelter and refinery, investment in new oil and gas blocks, and expansion of its steel and iron ore businesses.

Vedanta delivered a strong financial performance and growth on multiple fronts, with many of its businesses -- Aluminium, Zinc, Silver, Steel, Iron Ore, and Ferrochrome -- achieving their highest-ever annual production levels in the last fiscal. For FY24, the company recorded its second-highest annual consolidated revenue of Rs 1,41,793 crore and second-highest annual EBITDA of Rs 36,455 crores.

The mining major announced a plan to demerge its business units into independent pure-play companies in September last year.

The demerger will help unlock value and attract large-scale investment into the expansion and growth of its businesses. It will create independent companies housing the aluminium, oil & gas, power, steel and ferrous materials, and base metals businesses, while the existing zinc and new incubated businesses will remain under Vedanta Limited.