Vedanta stocks in focus amid board meet on NCDs, report of parent loan talks

Shares of Vedanta Ltd will be in focus on Thursday morning amid a media report that suggested the London-based parent Vedanta Resources is in advanced talks with global private credit funds including Bain Capital, Davidson Kempner, Ares SSG Capital and Cerberus Capital, to syndicate a $1 billion short-term loan. The report by the ET quoting two sources suggested the loans would be utilised for part-paying $3.2 billion of bonds maturing in 2024 and 2025,

Vedanta shares would also be in focus as the board of directors of the company will consider a proposal for issuance of non-convertible debentures (NCDs) on a private placement basis as part of its routine refinancing that is undertaken in ordinary course of business.

As per the ET report, the patent company has $1 billion of 13.875 per cent bonds coming up for repayment in January, another $1 billion of 6.125 per cent paper due in August 2024. Besides, $1.2 billion of 8.95 per cent bonds would be maturing in March 2025.

Parent Vedanta Resources’ high leverage and funding gap of $3 billion in FY2025 has made investors cautious. Kotak Institutional Equities in a recent noted said they are key areas of concern and overhang.

It however noted that Vedanta Resources has largely addressed the funding gap of FY24 via one-time measures such as selling 6 per cent stake in Vedanta. It said the $2.2 billion bonds maturity in FY25 could be a taller hump.

Kotak siad large dividends are no longer possible and Vedanta Resources might be forced to divest stake or assets in Vedanta. The bleak commodity cycle suggests a downside risk to earnings, it said.

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