Anil Agarwal's Vedanta Resources Secures Rs 9,502 crore Through Dual Tranche Bond Sale

Vedanta Resources has raised $1.1 billion through a dual tranche bond offering aimed at addressing its existing liabilities. The company, controlled by Anil Agarwal, disclosed the details in a filing to the Singapore Exchange.

The bond issue was executed by Vedanta Resources Finance II plc, a wholly owned subsidiary. It involved two tranches: one valued at $550 million with a 5.5-year maturity period at an interest rate of 9.475%, and the second, also worth $550 million, with an 8.25-year tenure at 9.85%.

Investor response to the offering was notably robust, with the bonds attracting a total demand of $3.4 billion from over 135 investors. This oversubscription of 3.1 times highlights strong market confidence.

Bond issuance details

The proceeds from the bond issuance will primarily be used to prepay outstanding bonds, cover transaction-related costs, and manage other debts, the company confirmed.

The bonds are expected to be rated ‘B’ by S&P Global and ‘B2’ by Moody’s. In a recent rating action, Moody’s raised Vedanta Resources' corporate family rating to B1 from B2, citing strategic improvements in its operations.

The company’s bond issuance total now represents the largest sum raised by an Indian issuer since 2022.

Credit upgrades boost Vedanta

In the near term, Vedanta is expected to use the bond proceeds to refinance existing debt, including $600 million maturing in April 2026 and $460 million due in December 2028. CreditSights analysts said that the higher-coupon December 2028 bonds would be prioritised for refinancing.

Recent credit rating upgrades by both Moody’s and S&P Global reflect the company’s improved financial outlook and governance. Moody’s upgraded the corporate family rating for Vedanta to B1 and raised the rating on its senior unsecured bonds to B2 from B3. S&P Global also assigned a preliminary ‘B’ rating to Vedanta’s new bond issuance.

(With PTI Inputs)