Vedanta Resources raises $1.2 bn ahead of open offer for Indian listed unit

Vedanta Resources raises $1.2 bn ahead of open offer for Indian listed unit

NEW DELHI: Vedanta Resources has raised $1.2 billion in a bond offering that saw strong investor interest, banking sources said on Friday.

Vedanta is looking to buy as many as 37.17 crore or 10 per cent of its India unit, at Rs 160 per share. At that price, the total consideration of the deal would be about Rs 5,948 crore ($814 million).

Sources said Vedanta Resources Finance II Plc, a subsidiary of London-based Vedanta Resources, had gone to the market for raising $1 billion.

It got $2.6 billion in offers from about 150 accounts, representing the largest oversubscription on a recent US dollar bond offering by the company.

The trade was well-received across geographies with APAC (Asia Pacific), EMEA (Europe, Middle-East and Africa) and North America constituting 49 per cent, 30 per cent, and 21 per cent of the final allocation.

The strong interest from investors also helped the company upsize the transaction to $1.2 billion from an initial indication of $1 billion.

At the same time, the strong demand enabled the company to tighten pricing by 42.5 basis points during the book-building process, they said.

Having failed in its attempt to delist its Indian subsidiary

, parent firm Vedanta Resources last month announced an open offer to buy up to 10 per cent of its shares.

Vedanta stock closed at Rs 206.90 on the BSE, down 0.5 per cent over the previous day’s closing.

In October last year, Vedanta Resources had failed to garner the required number of shares to delist its Indian arm at the offer price of Rs 87.5 apiece.

Thereafter, promoters had increased their stake from 50.14 per cent to 55.04 per cent through block deals totalling Rs 2,959 crore.

At the time of raising its stake in December 2020, Vedanta Resources had said the move was aimed at simplifying the group structure.

“This is in line with our stated strategic priority for simplifying the group structure to align the group’s capital and operational structures, streamline the process of servicing the Group’s financing obligations and improve a range of important credit metrics,” it had said.

The simplification process – which has been underway for several years – has involved mergers of group companies and may involve other share acquisitions in accordance with applicable law, the company had said.

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