Vedanta raises Rs 2,575 crore via 3-year bond to refinance existing debt

Core Viewpoint - Vedanta Limited has successfully raised ₹2,575 crore through a three-year bond sale, with a coupon rate of approximately 8.95%, influenced by market volatility and geopolitical tensions [7]. Group 1: Bond Issuance Details - The bond issuance was arranged by Barclays and Citigroup and targeted institutional investors, including mutual funds [7]. - Initially, the bonds were expected to be priced at around 8.75%, but increased spreads due to geopolitical tensions and fluctuations in government bond yields led to a higher coupon rate [7]. - The transaction is structured as a three-year non-convertible debenture issuance, with the potential to raise over ₹2,000 crore if demand remains strong [7]. Group 2: Financial Position and Leverage - Vedanta has been actively issuing bonds in domestic debt markets to refinance existing liabilities and manage upcoming maturities [2][7]. - The company's leverage has remained high due to consistent dividend outflows to its UK-based parent, Vedanta Resources Limited (VRL), which relies on these payouts to service annual interest obligations of ₹5,000 crore to ₹5,300 crore [6][7]. - As of March 2024, Vedanta's net leverage was 3.2 times, slightly down from 3.4 times the previous year, but still elevated [6][7]. - Improved earnings and a reduction of net debt to ₹1.11 lakh crore in fiscal 2025, including VRL debt of ₹0.42 lakh crore, have led to a decrease in consolidated net leverage to 2.55 times in fiscal 2025 from 3.2 times in fiscal 2024 [6][7].