Vedanta shares in focus as parent cuts gross debt by $1 billion

Shares of Vedanta could be in action on Tuesday morning after its parent Vedanta Resources paid all its maturing loans and bonds due in April 2023 and has thus reduced its gross debt by a further $1 billion.

The Anil Agarwal-led company said it reduced debt by $3 billion since it announced, last year in February, its intention to accelerate deleveraging and reduce its debt by $4 billion within 3 years. Vedanta has thereby achieved 75 per cent of its committed reduction in just 14 months, said the mining major on Monday.

Vedanta said its gross debt stood at $6.8 billion, as on April 24. This was against $7.8 billion at the end of March 2023 and $9.7 billion at the end of March 2022.

"During the balance of FY24, we believe that strong operational performance from our world class asset base coupled with robust commodity prices will lead to further deleveraging at Vedanta," said the Indian natural resources company," it said.

Last month, ratings agency Moody's downgraded Vedanta's London-based parent, warning that ongoing debt related issues expose Vedanta Resources "to material refinancing risks and exacerbate likelihood of a payment default or a distressed exchange".

There have been no defaults on debts from the group, Agarwal, Indian billionaire and founder of Vedanta Resources, said at the India Today Conclave in March.

On Monday, Vedanta shares settled at Rs 275.25 on BSE. Kotak Institutional Equities has a 'Sell' rating on the stock with a target of Rs 240 apiece. Antique Stock Broking finds the stock worth Rs 362. Overall, Vedanta shares have an average price target of Rs 298.50, as per Trendlyne, which suggests a 9 per cent upside potential for the stock.

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