Vedanta shares rally 7% as co approves raising Rs 1,000 crore via NCDs

Shares of Vedanta Ltd climbed nearly 7 per cent in Thursday's trade after the company's authorised committee of directors at its meeting held today considered and approved raising of secured, rated, listed, redeemable, non-convertible debentures (NCDs) on a private placement basis. Vedanta would be issuing upto 1,00,000 debentures of face value Rs 1,00,000 each, aggregating upto Rs 1,000 crore.

Following the development, the stock rose 6.56 per cent to hit a high of Rs 477.90. The proposed NCDs will be listed on BSE.

Systematix Institutional Equities said Vedanta's vertically integrated operations make it one of the lowest-cost aluminium producers in the world. The upcoming vertical expansions would further drive cost efficiency, it said. The commissioning of 1.5 mtpa train II and debottlenecking at the Lanjigarh refinery would enable 100 per cent captive alumina capacity of 6 mtpa, it said.

The commencement of mining operations at the Sijimali bauxite mine (Odisha) and various coal mines, and renewable power projects in the pipeline would ensure Vedanta's commitment to sustainability, the broking firm added,

"Vedanta is the only domestic aluminium producer with a 430kt smelting capacity expansion plan underway at Korba, BALCO. This coupled with certain debottlenecking plans will likely enable it to achieve its targeted capacity of 3.1mt by FY26. Higher volumes along with the rising proportion of value-added products (VAP) are expected to drive topline and enable margin expansion. We have retained our estimates and value VEDL at 5.5 times FY26 EV/Ebitda (4.3 times earlier) to arrive at a revised target price of Rs 536/share (Rs 418/share earlier),"Systematix Institutional Equities said.

The brokerage has upgraded the stock to BUY. Parent-level debt and capital allocation are key monitorables for Vedanta, it said.