Vedanta Announces $6 Billion Investment Strategy to Drive Substantial Growth
Vedanta, a leading mining conglomerate, is setting the stage for significant growth with a $6 billion investment across its diverse portfolio of businesses, which include aluminium, zinc, iron ore, steel, and oil and gas. This strategic investment aims to bolster the company's annual EBITDA by at least $2.5 billion. Executives disclosed these ambitious plans during a recent investor meeting, highlighting a pipeline of over 50 active projects and expansions designed to elevate the company's financial performance.
Expected to generate over $6 billion in incremental revenue, these initiatives are projected to increase Vedanta's EBITDA from the current fiscal's forecast of $5 billion to $6 billion in the upcoming year and further to $7.5 billion by FY27. Chairman Anil Agarwal envisions a transformative future for the company in the next 25 years, with Vice Chairman Naveen Agarwal detailing the investment plans aimed at achieving a yearly EBITDA potential of $2.5-3 billion.
The company's focus on cost leadership and capacity expansion across its operations is poised to significantly contribute to achieving the $7.5 billion EBITDA target. Among the major projects slated for commissioning are the expansion of the Lanjigarh Aluminium refinery, enhancements at BALCO, commissioning of the Athena and Meenakshi power plants, capacity expansion at the Gamsberg Zinc facility, an increase in iron ore production, and becoming India's largest ferro-alloys producer.
With a commitment to investing $6 billion in capital expenditures, Vedanta aims to bolster its EBITDA to $7.5 billion in FY26. Deleveraging remains a top priority, with a planned $3 billion reduction in debt over the next three years at the parent company Vedanta Resources, without increasing debt levels at the India-listed entity. CFO Ajay Goel outlined a strategy to reduce net debt to $9 billion by FY27 from the current $13 billion.
Presenting Vedanta as a compelling investment proposition, the company boasts a consistent track record of delivering over 15% CAGR in EBITDA over two decades. The planned demerger of businesses is anticipated to unlock significant value for shareholders, solidifying Vedanta's position as a diverse conglomerate with a rich portfolio in metals, minerals, oil and gas, and a venture into semiconductor and display glass manufacturing.
