Vedanta raises Rs 5,000 cr through NCDs

Vedanta Ltd., the India-listed resources conglomerate undergoing a revenue stream-wise reorganization, raised Rs 5,000 crore Wednesday through a private placement of secured debt, drawing top mutual funds and insurers, market sources told ET.

The non-convertible debentures (NCDs) of staggered maturities across three series drew anchor investors such as ICICI Prudential Mutual Fund, Aditya Birla Sun Life MF, Kotak Mahindra MF, Axis MF, Reliance General Insurance, Aseem Infrastructure Finance, and Alpha Alternatives.

“We are seeing strong flows into corporate bonds as overall liquidity has flipped from a Rs 2 lakh crore deficit in December to a Rs 2–2.5 lakh crore surplus,” said Shailendra Jhingan, CEO, ICICI Securities Primary Dealership. “With 10-year G-Sec yields down to around 6.2% and little room for further capital gains, funds are looking to lock in higher carry in quality AA and AA+ NBFC names offering 8% or more. It is a clear shift that investors want yield where they also have credit comfort.”


Series I of the debt matures on December 3, 2027; Series II on June 5, 2028; and Series III on June 4, 2027. Series I raised Rs 2,400 crore, priced at a 9.31% coupon. Series II garnered Rs 1,750 crore at a 9.45% coupon, the highest of the lot. Series III raised Rs 850 crore at an 8.95% coupon.

The base issue of Rs 4,100 crore included a green shoe option of Rs 900 crore, taking the total fundraising to the Rs 5,000 crore cap.

Proceeds will be used for general corporate purposes, including debt repayment and capital expenditure. The issue, backed by institutional demand from mutual funds, insurers, and AIFs, opened and closed on June 4.

The NCDs come with step-up and step-down provisions tied to credit rating movements. A downgrade from AA to A+ or below triggers a coupon increase, while an upgrade after such a downgrade resets the rate lower.