Vedanta Resources tests offshore dollar bond demand after Adani indictment: Report 

Vedanta Resources Ltd is proceeding with its second dollar bond offering in just two months, gauging investor interest in Indian offshore debt shortly after the US indictment of Adani Group founder Gautam Adani. 

A subsidiary of Vedanta, a London-based mining company primarily operating in India, is issuing a callable note, according to sources familiar with the matter who spoke anonymously. The bond will be divided into two tranches, with maturities of 3.5 and seven years. Initial price guidance is set at 10.375 percent and 11.375 percent, as per a Bloomberg report. 

Business Today was unable to verify the development independently. 

The offering, which could raise up to $500 million, marks the first since the Adani crisis and will serve as a key test for global demand for Indian high-yield credit in the wake of the allegations against Adani. The notes also have call options.  

In September, Vedanta Resources raised $900 million in its first dollar bond issue in more than two years at a coupon of 10.875 percent. 

Vedanta will use the proceeds from the latest sale to refinance outstanding bonds due in 2028, a Reuters report said. Citigroup, Barclays, Deutsche Bank, JPMorgan, and Standard Chartered Bank are the joint global coordinators and lead managers for Vedanta’s dollar bond, it added. 

The Vedanta parent has a net-debt target of $4.5 billion by FY25-end. At its earnings call earlier on November 8, the Vedanta management noted that the parent VRL has reduced debt by $4.7 billion in the past two-and-a-half period, bringing it down to $4.8 billion, which was the lowest level in the decade. In H1FY5, VRL debt fell by about $1 billion, as per the management. This was ahead of the commitment of $3 billion cut that it suggested over three years. 

Vedanta’s $4.8 billion debt has three components. It has bonds worth $3 billion. It has about $1 billion worth of bank loans, and the remainder about $850 million is the private facility from StanChart. 

In the September quarter, VRL refinanced $1.2 billion bonds. Of this, the last tranche came at 9.99 per cent yield. Overall, this refinancing was 3 per cent lower cost, resulting in annual savings of over Rs 300 crore, the Vedanta management suggested at its earnings call.