Vedanta launches QIP to raise up to Rs 8,000 crore

Vedanta Ltd launched a qualified institutional placement (QIP), on Monday. In an exchange filing, the metals-to-oils conglomerate announced that its fundraising committee had approved the QIP's launch at a floor price of ₹461.26 per share.

Shares of Vedanta was trading at Rs 460.25 on Tuesday, up 0.19% on BSE.

The company also added that it may offer a discount of not more than 5% on the floor price for the issue.


The QIP aims to raise $600 million (Rs 5014 crore) with an option to raise an additional $200 million ( Rs 1670 crore) in case of oversubscription, according to sources.

The issue has seen robust demand, and has already crossed 1.1 time book on Monday evening, sources said. HDFC Life, SBI Life and WhiteOak were among the institutions that are said to have put in bids. sources added. The proceeds will be used to reduce debt and fulfil certain capital expenditure obligations, said sources.

Earlier in May, the board of the natural resources major had approved fund raising of up to ₹8,500 crore, which then got shareholder approval in June.

Vedanta is currently in the midst of several growth projects and is looking at a long-term capital expenditure of around $8 billion. Its capital expenditure target for the current fiscal is likely at $1.9 billion, up by more than a third from the $1.4 billion it spent last year.

Citibank, JM Financial and Nuvama are the bankers for the deal.

While some of the proceeds of the fundraising will be used to fund the ongoing capital expenditure, some of it may also be used to retire high-cost debt that the company has taken in the past couple of years, a move which could potentially boost profits, said a person familiar with the development.

Vedanta had a net debt of ₹56,338 crore at a consolidated level and a net-debt to operating profit ratio of 1.5 times as of March-end. Its gross debt was ₹71,759 crore, of which 82% was in Indian rupees, and the rest in foreign currency.