THEBUSINESSBTES BUREAU

NEW DELHI, FEBRUARY 26, 2026

Vedanta Limited said its Committee of Directors has approved raising up to ₹3,000 crore through non-convertible debentures (NCDs) on a private placement basis, a move aimed at further strengthening the company’s capital structure while optimising borrowing costs.

In an exchange filing, the company said it will issue up to three lakh unsecured, rated, listed and redeemable NCDs with a face value of ₹1,00,000 each, aggregating to ₹3,000 crore. The NCDs will be listed on the Bombay Stock Exchange.

Previous issues of debt instruments and bonds have attracted significant investor interest. In October 2025, a $500 million bond issue was oversubscribed three times, while an NCD issuance in June last year received nearly 60 percent oversubscription.

The company continues to access both domestic and international debt markets. While NCDs and bank funding remain supportive, the updated External Commercial Borrowing (ECB) regulations have also seen interest from overseas lenders in refinancing transactions. Domestic NCDs, bank loans, ECBs and US dollar bonds together provide diversified sources of capital, supporting financial flexibility and balance sheet strength for the company.

This comes at a time when the conglomerate has been gradually deleveraging its balance sheet and refinancing debt to lower its overall borrowing costs. As per a recent exchange filing, Vedanta Ltd’s Net Debt/EBITDA improved from 1.40x in 3QFY25 to 1.23x currently, with a target of reaching under 1x in the near term.

At the Vedanta Resources level, the ratio has improved significantly from 3.3x in FY20 to around 1.9x currently. An improvement in the net debt-to-EBITDA ratio indicates a strengthening of the balance sheet and the ability to service debt from operating earnings. Net debt at parent Vedanta Resources (excluding Vedanta Limited) too has declined from about US$8.9 billion in March 2022 to around US$4.8 billion as of December 31, 2025.

Sustained investor interest comes amid improving operating performance across businesses, supported by higher volumes, cost efficiencies and favourable commodity trends. The proposed demerger, which is nearing completion, is also seen by analysts as a structural positive for long-term value creation.

In parallel with its deleveraging initiatives, Vedanta plans to spend nearly ₹40,000 crore on capex over the next few years as it aims to strengthen market leadership, increase its EBITDA to almost $10 billion and achieve an EBITDA compounded annual growth rate of 18 percent over the near term. As of September 2025, the company had cumulatively spent nearly ₹35,000 crore of the total approved capex of around ₹75,000 crore, with the rest to be deployed over the next few years, according to a recent exchange filing. Major projects across aluminium, zinc, oil and gas, iron ore, steel and power are scheduled for commissioning in the next two fiscals.

Research firms and institutions have a positive view on Vedanta, with BofA Securities upgrading its rating to “Buy” on the company, given the bullish outlook on aluminium, supportive silver prices and a healthy dividend yield. “Significant deleveraging at the parent company minimizes the risk of an increase in brand fee rates or inter corporate loans,” BoFA Securities said in a report. The firm has increased the target price to ₹840 from ₹480, denoting an upside of 75 percent.

 “We raise our FY26E–28E EBITDA by 16–21% as we incorporate higher aluminium forecasts, higher fair value of Hindustan Zinc, US Dollar Indian Rupee depreciation, and a reduced holding company discount of 5% (versus 15% earlier) given the stronger balance sheet of the group,” it added. At the same time, BoFA Securities also estimates Vedanta’s FY27 operating cash-flow to increase by +31% year on year.