- Vedanta Aluminium is raising about ₹13,500 crore ($1.4 billion) from Axis, HDFC, and ICICI Bank to refinance inherited debt after the company's split from the Vedanta Group.
- Axis Bank has signed a loan agreement for ₹55 billion with Vedanta Aluminium, while HDFC Bank and ICICI Bank will collectively lend about ₹80 billion to the new independent entity.
- The loan tenors range between 6-1/2 years to 7 years, with proceeds to refinance existing debt inherited from the previous company structure.
- Crisil Ratings upgraded Vedanta Aluminium's rating to AA+ with a stable outlook last month, indicating improved financial flexibility.
- The Vedanta Group split into five separate listed companies, with four focusing on aluminum, power, oil and gas, and iron ore beginning trading in June.
- An Indian court approved the new structure of the Vedanta Group in December.
Vedanta Aluminium is raising ₹13,500 crore ($1.4 billion) from Axis, HDFC, and ICICI Bank to refinance debt after its recent business split. This is the first major local-currency loan for the newly independent entity, which aims to enhance financial flexibility and reduce debt.123
The loan agreement includes 55 billion rupees from Axis Bank, while HDFC and ICICI will provide a combined 80 billion rupees. The loan tenors range from 6.5 to 7 years, with interest rates between 7.9% and 8%.
This fundraising effort reflects Vedanta's strategy to establish independently financed businesses, improving its financial standing. The restructuring was approved by an Indian court in December, leading to the formation of five separate listed companies, including those focused on aluminum, power, oil and gas, and iron ore, which began trading in June.7
Crisil Ratings recently upgraded Vedanta Aluminium's rating to AA+ with a stable outlook, citing improved financial flexibility. Analysts predict that Vedanta Aluminium's net debt could fall below 100 billion rupees by financial year 2028, supported by robust cash flows.5
“The loan, with tenors of 6.5 to 7 years, carries interest rates of 7.9%-8% and will be syndicated by Axis Bank. Crisil Ratings recently upgraded Vedanta Aluminium to AA+ with a stable outlook, and ICICI Securities projects net debt could fall below ₹100 billion by fiscal 2028.”
