Promoter entity Finsider International sells entire 2.6% stake in Vedanta

Finsider International is a unit of Anil Agarwal-led Vedanta Resources, whose debt stood at around $6 bn as of March 31

Finsider International Company, a promoter group entity, sold its entire 2.63 per cent shareholding in the domestic miner Vedanta on Wednesday. It sold nearly 98 million shares at Rs 427 apiece to raise Rs 4,184 crore. Names of the buyers were not disclosed by the exchange. 

Shares of the mining conglomerate Vedanta plunged as much as 6.5 per cent before recouping some losses. They ended at Rs 442, down 2.6 per cent over the previous day’s closing.

Finsider International is the unit of Anil Agarwal-led London headquartered Vedanta Resources (VRL). As of March 31, VRL’s debt levels stood at around $6 billion. Since last year, the commodities major has faced several rating downgrades with analysts flagging liquidity issues and high default risk. The amount raised through Wednesday’s share sale will help the group pare its debt.

 

“This is in line with the group’s commitment to significantly deleverage its balance sheet at both India and the VRL level and in line with broader initiatives to support its strategic growth plans. Post-repayments made from the transaction, VRL would have reduced its debt by upwards of $650 million since the beginning of FY25,” said a Vedanta Resources spokesperson.

At the end of the March 2024 quarter, the promoter holding in Vedanta stood at 61.95 per cent, of which Finsider held 2.63 per cent.

Shares of Vedanta have rallied over 70 per cent so far this year, underpinned by the company’s measures to reduce cost and improve operational efficiencies and demerger plans.

In September 2023, the mining conglomerate announced plans to demerge and separately list five key businesses, including aluminium, oil and gas, and steel. The demerger could lead to the creation of six independent verticals - Vedanta Aluminium, Vedanta Oil & Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals, and Vedanta. The company is expected to allocate its debt across the demerged entities in proportion to their assets

Earlier, Vedanta had spelt out the plan to deleverage its debt by $3 billion over the next three years.

“Deleveraging is our priority. We would be deleveraging the debt of Vedanta Resources by $3 billion over the next three years. Vedanta’s cash flow pre-growth capex is estimated to be $3.5-4 billion for FY25, sufficient for secured debt maturities of $1.5 billion,” Navin Agarwal, Vice Chairman, Vedanta had said during an analysts’ meeting in March. At the group level, Vedanta is eyeing an Ebitda of $6 billion in FY25 and over $7 billion in FY26 on the back of operational efficiencies across businesses.