Vedanta in $6-bn capex to push EBITDA
It has over 50 active projects and expansions in pipeline to drive growth; It’ll be investing across verticals with an incremental yearly EBITDA potential of $2.5 bn by FY27
Some of the significant projects due for immediate commissioning include a refinery expansion at Lanjigarh Aluminium facility, Athena and Meenakshi power plants, capacity expansion at Gamsberg Zinc facility, raising iron ore production and becoming India’s largest ferro-alloys producer
New Delhi: Mining conglomerate Vedanta Ltd will invest $6 billion across businesses that span from aluminium and zinc to iron ore, steel and oil and gas as it looks to add at least $2.5 billion to annual EBITDA, its executives said in an investor meeting.
It has a pipeline of more than 50 active projects and expansions to drive growth, which is expected to generate incremental revenue of over $6 billion and boost EBITDA from an expected $5 billion in the current fiscal ending March 31 to $6 billion in the next and up to $7.5 billion by FY27, they added.
Vedanta Chairman Anil Agarwal, according to a presentation made at the investor meeting, said the company “will get to a different level in the next 25 years”. His brother and vice chairman Naveen Agarwal gave details of the plans. “Projects (are) under execution to deliver $7.5+ billion yearly EBITDA,” he said, adding $6 billion is being invested across business verticals that will potentially yield incremental revenues of $6 billion and “incremental yearly EBITDA potential of $2.5-3 billion”.
Naveen further said: “We continuously explore options to create additional value at all our sites. We currently have several high-impact projects in execution mode across all our businesses. These will further contribute to our cost leadership, while substantially increasing our operating capacities. These levers will help drive our EBITDA towards the stated target of $7.5 billion annually.”
Some of the significant projects due for immediate commissioning include a refinery expansion at the Lanjigarh Aluminium facility from 2 million tonnes per annum to 5 million tonnes, expansion at CO to 1 million tonnes, commissioning of the Athena and Meenakshi power plants to almost double the commercial power portfolio to 5 GW, capacity expansion at Gamsberg Zinc facility to take Zinc International capacity to 5,00,000 tonnes from 2,73,000 tonnes now, raising iron ore production from 5.3 million tonnes to 13 million tonnes, and becoming India’s largest ferro-alloys producer with a 5,00,000 tonnes per annum capacity. “40+ ongoing growth projects with a plan to spend $6 billion in capex” will help boost EBITDA from an estimated $5 billion in the current fiscal ending March 31 to $7.5 billion in FY26 (April 2025 to March 2025),” Vedanta said in the presentations.
Stating that deleveraging was its “utmost priority”, it said a $3 billion deleveraging over the next three years has been firmed up at parent Vedanta Resources without an increase in debt levels at the India-listed firm. Net debt is being targeted to be cut to $9 billion by FY27 from $13 billion now, its CFO Ajay Goel said, adding parent Vedanta Resources has de-leveraged balance sheet by $3.5 billion in the last two years to bring down net debt to $6 billion and has “reprofiled and smoothened near-term bond maturities of around $4 billion. Vedanta Limited cash flow pre-growth capex is estimated to be $3.5-4.0 billion for FY25, sufficient for secured debt maturities of $1.5 billion with refinancing as an additional option,” he said.
