INDIA: ICRA has upgraded Vedanta Limited’s long-term credit rating to [ICRA]AA from [ICRA]AA-, reflecting the company’s strengthened credit profile. The short-term rating has also been reaffirmed at [ICRA]A1+.

This upgrade comes amidst significant developments at Vedanta Group that focus on long-term strategic growth and financial strength. Vedanta Ltd. has built a war chest exceeding Rs 22,000 crore, comprising mainly of existing cash reserves, stake sales, and dividends from its subsidiary Hindustan Zinc Limited (HZL). Over the past few quarters, Vedanta has deleveraged its balance sheet resulting in an improvement in the net debt to EBITDA ratio from 1.9X in Q1FY24 to 1.5X currently. Similarly, the mining major’s UK parent – Vedanta Resources Limited – has seen an improvement in the current group net debt to EBITDA 3.3X in FY20 to a current 2.2X.

VRL is also actively pursuing to refinance a substantial portion of its outstanding bonds, aiming to lower the consolidated entity’s interest costs further. All the deleveraging efforts are also expected to improve the overall financial flexibility of the Group. Notably, in July 2024, S&P Global upgraded the VRL’s credit rating to B-/stable from CCC+.

The Vedanta Group has some of the world’s largest mines in various categories. As per its annual report, it has the world’s largest underground zinc-lead mine in India’s western state of Rajasthan. Vedanta’s subsidiary – HZL – is the third largest producer of silver in the world, while its oil and gas unit operates the world’s longest continuously heated pipeline.

Vedanta has recently gone through fundraising initiatives such as a Qualified Institutional Placement (QIP) worth approximately $1 billion and an additional ~ $400 million from the sale of Hindustan Zinc Limited (HZL) shares. Furthermore, around $500 million raised by Vedanta Resources Limited (VRL) through a stake sale in VEDL in June 2024 will also aid in reducing the Group’s overall debt burden. This move is expected to improve the group’s leverage and lower its interest expenses, signaling a robust financial strategy focused on long-term stability and growth.

In addition to these financial improvements, Vedanta’s operational performance has also been a key driver. The company has reported solid results, especially in its aluminum and zinc businesses, where improved realizations and cost efficiencies have led to strong operational performance.  They together contributed over 80% to consolidated OPBITDA in FY2024 and Q1 FY2025. The company recorded the highest-ever alumina production at Lanjigarh and mined metal products at the Zinc India unit. It brought down the overall cost of production by 20 percent YoY due to structural changes and other initiatives.  Lanjigarh has a capacity of 3.5 MTPA, which is one of the largest refineries in the world.

Strategically, Vedanta continues to focus on strengthening its diverse portfolio. A key aspect of its strategy has been increasing the share of value-added products, particularly in the aluminum segment, which is expected to boost profitability and support long-term growth. The company’s efforts to streamline costs and focus on vertical integration will further contribute to improved margins and operational efficiency. The company’s investment in expanding its capacities and reducing operational costs ensures it is well-placed to maintain its market leadership.

The company is on track with its demerger after receiving a no-objection certificate from secured lenders and the stock exchanges. It has already filed the scheme with the National Company Law Tribunal (NCLT).

The de-merger, which is planned to be a simple vertical split, will enable value unlocking and attracting big-ticket investment into the expansion and growth of each of its demerged businesses. By further simplifying its corporate structure, the demerger will create sector-focused independent businesses that will provide investment opportunities to Indian and global investors, including sovereign wealth funds and strategic investors.

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As an organization dedicated to supporting the dream of an Atmanirbhar Bharat in natural resources, Vedanta’s demerger will create sector-focused entities, aligned with India’s global leadership goals in critical minerals, energy security as well as renewables and technology sectors. The demerger will help in simplifying Vedanta’s corporate structure by creating independent businesses and will offer global investors direct investment opportunities in pure-play companies linked to India’s impressive growth.

Earlier this month, at Vedanta’s Annual General Meeting, Anil Agarwal, Chairman, Vedanta Ltd. had said, “Demerger of our businesses will lead to the creation of 6 strong companies, each a Vedanta in its own right. This will unlock massive value. Each demerged entity will chart its course but will follow Vedanta’s core values, its enterprising spirit, and global leadership.”

Vedanta’s existing businesses will be structured in the following six independent companies after the demerger:

• Vedanta Aluminium
• Vedanta Oil & Gas
• Vedanta Power
• Vedanta Steel and Ferrous Materials
• Vedanta Base Metals
• Vedanta Limited

The demerger is planned to be a simple vertical split, for every 1 share of Vedanta Limited, the shareholders will additionally receive 1 share of each of the 5 newly listed companies.

Vedanta has a track record of giving strong returns to its shareholders. As of 30 June’24, Vedanta’s total shareholder return over 5 years stood at 276%, while the 5-year average accumulated dividend yield at 65%, delivering significant value for shareholders.

Currently, Vedanta is the Indian subcontinent’s only diversified natural resources company. It has invested over $35 billion in India and is making rapid expansion efforts through 50 strategic growth projects. Vedanta has a unique portfolio of assets among Indian and global companies. It is the sole producer of zinc and silver in India – and amongst the largest in the world. It is India’s largest producer of aluminum and largest private sector producer of oil, along with being one of India’s largest generators of power and purchasers of renewable energy. Also the sole producer of Nickel in India, Vedanta houses various key metals and minerals in its portfolio including chromium, copper, and a traditional ferrous vertical including iron ore and steel.

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INDIA: The Vedanta Group’s strategic roadmap to a $10 billion near-term EBITDA will be powered by the timely execution of 50+ high-impact growth projects including those in Zinc, Aluminum, Oil & Gas, and Power businesses. These projects are at an advanced stage of completion, as per a PowerPoint presentation made to more than 45 fund managers and analysts, who were on a site visit organized by Vedanta Group. PTI has reviewed a copy of the presentation.

Vedanta’s aluminum business has projects underway to achieve ~3.1 MTPA of integrated supply. It sits in the first quartile of the global cost curve, with the cost of production at multi-year lows – $1711/T – with a 100% vertically integrated supply chain. The business has a 2x strong demand outlook with India’s domestic market set to double every 5 years.

Vedanta’s Zinc business currently produces 1.2 MTPA (Zinc metal) at the cost of $1,000/t while silver volumes are at 800 MTPA. The business has a 75% + market share in India’s primary zinc market and the growth plan for 2 MTPA is currently under development.

Similarly, Vedanta Group’s Oil and Gas business is focusing on expanding its resource base to >2 BBOE (billion barrels of oil equivalent) in the next 3 years, with a production target of 300 KBOEPD (thousand barrels of oil equivalent per day). Additionally, the Vedanta Group has major projects under execution that include capacity expansion at the Lanjigarh alumina refinery from 3.5 to 5 MTPA, BALCO smelter from 0.6 to 1 MTPA, and raising the overall power generation capacity from 2.9 GW to 5 GW. Together, the Vedanta Group is investing around $8 billion in its ongoing growth projects.

Several leading brokerage houses have taken note of this, upgrading their target price for the company.

Upgrading Vedanta’s price target to Rs 644, Nuvama in its report said, “We are raising FY25E/26E EBITDA by 5%/6% factoring in operational efficiency, lower aluminum CoP due to captive alumina and higher premiums for aluminum and zinc. Meanwhile, the approval by lenders shall allow for the demerger of companies by end-FY25. We value VEDL ex-HZ at 6x FY26E EV/EBITDA (earlier 5.5x) and HZ at 7x FY26E EV/EBITDA, yielding a TP of INR644 (earlier INR542),”.

Further, Investec upgraded the target price to Rs 473. CLSA noted in its recent report that profitability improvement initiatives like major cost reductions via alumina refinery capacity expansion, higher power generation efficiency, and commissioning coal blocks and bauxite mines will be key to a re-rating.

Vedanta’s existing assets along with the growth projects will potentially generate $5 billion in free cash flows while contributing significantly to nation-building through a sustainable return to stakeholders. The $10 billion near-term EBITDA includes $ 4.2 bn from Aluminium, $2.7 bn from Zinc India (Zinc and silver), and $0.9 billion from Oil and Gas.

The Group’s plans make it well positioned to capitalize on India’s economic growth as the country’s Gross Domestic Product (GDP) is expected to grow at a healthy rate, reaching $7 trillion by 2030 as per MoF’s economic review report.

The company has proposed a vertical split of the businesses and will list five additional entities on the stock exchanges, subject to receiving all regulatory approvals, by the end of this year.  As per the plan, for every share of Vedanta Limited, the existing shareholders will additionally receive one share of the five newly listed companies. The demerger will create independent pure-play companies in the Aluminium, Power, Base Metals, Oil & Gas, and Steel and Ferrous, while Zinc and other existing businesses will remain under Vedanta Limited.

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His talks resonated with people across Chicago land, leaving a profound impact on the youth and individuals of diverse backgrounds. This universal message transcended race and religion, offering knowledge that spoke to the shared human experience.

In collaboration with the University, Prayagraj will offer youth and adult retreats in 2024 as well as online sessions throughout the year. For more information contact Aparna Kulkarni at 847-306-7616 or AparnaK@umasinc.com.

Unearthing Human Nature

Vedanta is a science which deals with human beings. An encyclopedia that has the compilation of subtlest thoughts related to the human relationship with the Transcendental Self. Rendered by, several enlightened sages of India. These great people dedicated their lives thousands of years ago to reflect upon the mystery of human origin, purpose of living, and constitution of human inner nature. The effort of such crystalline contemplation culminated in the Vedanta philosophy, which decoded the apogee of happiness. Present-day humans are disconnected from their roots and live in ignorance about this state of Bliss.

The Labyrinth

Today, the world over alma maters and mushrooming educational institutions are priming students with a lot of data. No doubt valuable to earn wealth and mark the material progress of nations. But limit the young in their rational approach and application of the knowledge provided. Very few truly implement the knowledge gained. The rest just follow a beaten pattern to work. Consequently, the young become victims of contemporaneity pressure. Affliction arises out of work culture and impending personal perils caused by a lack of clarity in balancing their work and professional lives.

The Unrestrained Mind, the Ignorance of Intellect

The youth are unaware of Vedantic education. People hence find themselves tormented by the pernicious traits of an ungoverned mind. The lack of higher values in present-day education has made humans weak. They find challenges in life difficult to handle, mostly, amongst well-educated and the rich. Depression and stress-related ailments have risen to alarming proportions. Divorce has reached record-breaking numbers worldwide. The human mind turns malignant when left unattended to make decisions by itself in the absence of the intellect. As a result, greed has led to decadence in society. Humans have turned greedy to amass ill-gained wealth and devour millions, billions, without paying any heed to others living juxtaposed in denial. Ultimately, the greedy only find themselves isolated and lonely.

The Problem Lies Elsewhere

Knowledge gained from universities has no doubt raised the standard of human living and made people wealthy and indulgent. But are they happy? By their admission, people have lost their morals, peace, and cheer. The standard of life has deteriorated to a substantial level.

The lack of Vedantic knowledge also makes it difficult for individuals to unravel one’s true aptitude. As a result, few flourish in their natural field of work. Others experience work as a burden, instead of finding it a source of pleasure and joy. Vedanta brings in clarity to discover one’s aptitude and subsequently identify a suitable field of work. One then finds success by employing the right technique of action guided by the intellect. When work becomes a pleasure, so does the working environment.

Live to Give

Giving should be preceded by thinking. Take a look at the charity structure in the world. Ideally, it should be the confluence of feeling and thinking to give society punctiliously. A true philanthropist will initiate research if wealth gives charity, and has resolved a whirlwind of present predicaments. Corporations today have started charity enclaves, urged by the government to be socially responsible. But has this changed the mindset of people? Seldom has the donor looked into the effect and effort of organizations and hence the persisting quandaries in the world remain recurring. Genuine philanthropists share their wealth. However, most charitable entities are unable to reach the bottom of the problem. Applying balm to a wound is calming. But that will not help in getting to the source of the disease. True charity is supposed to lift a person spiritually. Make one independent to progress along with others. Not make them dependent selfish, lethargic, and diseased. Remember, “Candent living brings forth Prudent giving”.

The Time is Ticking

Few care about Vedantic intellectual education. An education is beyond the precincts of secular education provided by schools and universities. The educated should mull over the recent graph of wars, poverty, crimes, rapes, stress, divorces… These unfortunate escalations of events have gripped all families in the world. Even children are not spared, as crime perpetrated on children is on the rise.

Pressure on children has led them not to cooperate with parents and educators. Eager to leave homes, the moment they reach the periphery of youth. Therefore, the necessity of bringing in a value system alongside secular education in society should be implemented imminently. The good and spiritual side of humans has to be tapped. The negative will then slowly diminish. Vedanta impacts an individual to harness one’s mind. By imbibing its knowledge, you gain intellectual clarity. This then creates collectively awakened human beings to be more affable and reach out. There is a saying: “You cannot reach God unless you serve & love the expressions of God”.

For the Youth

The future of every country is the power of youth. Parents must pause for a moment and look behind at the legacy they leave, Asian families in recent times have a tradition of debts. In Westerners, a tradition of separation is in relationships, angst in their behavioral habits, and pills to pop anxiety. This directly affects every child.

The youth get influenced by anyone higher in stature. They want to emulate everything their icons do. It is hereby the responsibility of all leaders to leave trails of culture and wisdom that follow sound intellectual reason. Social media has become the death knell of values, a harbinger of sorrow. A disorder which is the eating up concentration of youth and even adults. Use it to evolve, and benefit others, but don’t get abused by it, harm others, and devolve!

An effort has to be made to save the youth. Leaders need to plan a paradigm shift in education. An awakened person would leave behind a cleaner world and not unresolved filth for the young to remove. Albert Einstein made an apt, wise statement: ‘We cannot solve our problems with the same thinking we used when we created them’.

Oh, folks! Isn’t it time to wake up? Awaken the intellect with the knowledge of Vedanta.

It is hence time to go back only to move forward in Time.

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