by Vedanta Limited will complete its steel and raw materials business in the first half of the current financial year. Chairman Anil Agarwal gave this information. The company had initiated a strategic review of these businesses in June last year and had said that the demerger of these businesses would be completed by March 2024. However, Agarwal said last month that he would sell the business only at the “right” price.
The company acquired Electrosteel Steels Ltd through bankruptcy proceedings in 2018. Agarwal said in the company’s 2023-24 (April-March) annual report that the plan to sell the steel business is part of the company’s efforts to reduce debt. Holding company Vedanta Resources has reduced debt by $3.7 billion in two years.
“We want to reduce Vedanta Resources to $3 billion over the next three years,” he reiterated. Vedanta Resources had $6 billion in debt as of March 31, 2024. It also restructured $3.2 billion in bonds last year. Due to this, the maturity of these bonds was extended to 2028-29 (April-March).
“This new liquidity flexibility allows us to increase cash flow for critical capex projects,” Agarwal said. Vedanta plans to spend $1.9 billion on capex this year, up from $1.4 billion spent last year.
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As for its aluminum operations, the company is working to expand its alumina refinery capacity to 6 million tonnes per annum by FY26, while targeting a smelting capacity of 3 million tonnes in the second half of this year. “We expect our EBITDA margin to increase manifold and at 3 MTPA capacity, the aluminum business alone will generate over $4 billion of EBITDA,” executive director Arun Mishra and chief financial officer Ajay Goyal were quoted as saying. The company is looking to expand the capacity of its zinc operations, its oil and gas business and iron ore business in India.
