Vedanta Eyes Major Transformation with Strategic Deleveraging and Growth Plans

Anil Agarwal, Chairman of Vedanta, has outlined a transformative agenda for the conglomerate in the current fiscal year, emphasizing disciplined growth and operational excellence. In a recent shareholder update, Agarwal detailed the company’s commitment to sustainably grow while maintaining a healthy balance sheet, with plans to deleverage Vedanta Resources by USD 3 billion over the next three years and aiming for an annual group EBITDA of USD 7.5 billion by FY26.

The company has announced substantial investments totaling USD 6 billion across its diverse portfolio, including aluminium, zinc, iron ore, steel, and oil and gas sectors. These investments are projected to significantly boost revenue and EBITDA in the coming years. For instance, Vedanta's aluminium production hit a record 2.37 million tonnes last fiscal year, benefiting from vertical integration and expansion efforts, such as the Lanjigarh refinery ramp-up.

Operational efficiencies have also been a highlight, with Hindustan Zinc achieving its highest-ever annual mined metal production and a 15% cost reduction over the last six quarters. Additionally, the oil and gas segment has effectively countered natural production declines, and the iron ore business reported a record volume of 5.9 million tonnes.

Vedanta is also pushing forward with its power generation goals, aligning the startup of unit-1 of the Meenakshi power plant and pursuing a target of supplying 5 GW of commercial power within two years. Furthermore, the company’s steel production capacity is set to increase, with the ESL Steel plant expansion poised to enhance output significantly.

On the financial front, Vedanta Resources has successfully reduced its net debt by over USD 3.5 billion in the past two years, while Vedanta Ltd aims to cut its net debt to USD 9 billion by FY27 from the current USD 13 billion.

A strategic demerger of Vedanta Ltd into independent verticals is underway, aimed at unlocking potential value and promoting sustainable growth. This reorganization is expected to be completed by December 2024, after which Vedanta will retain control over the businesses of Hindustan Zinc, as well as its display and semiconductor manufacturing units.