Vedanta Repays ₹7,500 Crore Loan, Cuts Debt by ₹4,600 Crore

Vedanta Ltd, the mining and metals giant, has repaid a ₹7,500 crore ($900 million) high-cost loan, reducing its debt burden by ₹4,600 crore ($550 million). The repayment was funded through a mix of proceeds from its ₹8,300 crore ($1 billion) Qualified Institutional Placement (QIP) in June 2024 and a fresh loan at a lower interest rate.

Loan Refinancing to Reduce Costs

The loan was originally taken by Vedanta’s subsidiary, THL Zinc Ventures, in May 2023 at a high-interest rate of 13.9%. As part of the repayment, Vedanta secured a new ₹2,900 crore ($350 million) loan from JP Morgan and other banks at a lower 9.6% annual interest rate. This move will save the company ₹750 crore ($90 million) in interest costs annually. The new financing package also comes with improved terms and conditions.

Deleveraging Strategy Strengthens Balance Sheet

This step aligns with Vedanta’s broader strategy to reduce its overall debt. By December 2024, the company’s net debt-to-EBITDA ratio had improved to 1.4x from 1.9x in Q1 FY24. The company aims to bring this ratio down further to 1x in the medium term.

Parent Company Also Cuts Debt

Vedanta’s parent firm, Vedanta Resources Ltd (VRL), has also made significant progress in debt reduction, bringing its total outstanding debt down to ₹41,000 crore ($4.9 billion), its lowest level in a decade.

Positive Market Response and Credit Ratings

In February 2024, Vedanta raised ₹2,600 crore through unsecured non-convertible debentures (NCDs) with an interest rate of 9.40-9.50%. The NCDs attracted institutional investors like ICICI Prudential, Kotak, Nippon, Aditya Birla Sun Life, and Axis.

Credit rating agencies ICRA and CRISIL responded positively to Vedanta’s deleveraging efforts, assigning an ‘AA Rating/Watch with Developing Implications.’ This improved rating is expected to help the company refinance debt at even lower costs in the future.

About Vedanta Limited

Vedanta Limited is a Mumbai-based Indian multinational mining company primarily engaged in iron ore, gold, and aluminum mining, with operations in Goa, Karnataka, Rajasthan, and Odisha.

As of March 12, 2025, at 12:28 PM IST, Vedanta share price stands at ₹438.75, down ₹2.80 (0.63%) for the day. The stock opened at ₹444.90, reached a high of ₹448.35, and touched a low of ₹437.90. Vedanta has a market capitalisation of ₹1.63 lakh crore, a P/E ratio of 13.10, and a dividend yield of 10.75%. The stock’s 52-week high is ₹526.95, while its 52-week low is ₹249.50.

Conclusion

Vedanta’s strategic debt reduction and refinancing efforts have strengthened its financial position. With improved credit ratings and lower interest costs, the company is on track for sustainable growth.

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