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May 28, 2024

Vedanta Plans $1 Billion Share Sale Amid Market Rally

Indian commodities tycoon Anil Agarwal’s Vedanta Ltd. is gearing up for a major share sale that could raise up to 85 billion rupees ($1 billion) in the coming weeks, according to sources familiar with the matter. The company is collaborating with advisers from Axis Bank Ltd.’s subsidiary, Axis Capital, and Citigroup Inc. to facilitate the offering.

Vedanta has already begun engaging with potential investors, including Middle Eastern funds, to gauge their interest. The sources, who requested anonymity due to the private nature of the information, revealed that the company might opt for a qualified institutional placement (QIP) for this share sale. However, this move will require shareholder approval before proceeding.

The timing of the share sale is strategic. Vedanta is considering launching the deal soon to capitalize on the ongoing rally in the Indian equity markets. The BSE Sensex, India’s benchmark stock index, has surged nearly 20% over the past seven months, creating a favorable environment for raising capital.

Vedanta’s stock performance has been impressive this year, with shares soaring by 78%, giving the company a market valuation of approximately $20.6 billion. This robust growth in share price reflects investor confidence and the company’s strong market position.

Despite the buzz around this potential share sale, official responses have been sparse. A spokesperson for Citi declined to comment on the matter, and neither Axis Bank nor Vedanta responded immediately to emailed requests for comments.

As Vedanta navigates through this process, the potential injection of $1 billion could significantly bolster its financial standing and enable it to pursue further growth opportunities. The engagement with Middle Eastern funds highlights Vedanta’s strategic efforts to attract diverse investment sources, which could enhance its financial stability and expand its market reach.

In summary, Vedanta’s anticipated $1 billion share sale represents a significant move in the company’s financial strategy. By leveraging the current positive market conditions and engaging with key financial advisers and potential investors, Vedanta aims to strengthen its market position and secure substantial capital for future endeavors. The coming weeks will be crucial as the company seeks shareholder approval and finalizes the details of this major financial initiative.

Jhumpa Lahiri

Jhumpa Lahiri

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