Vedanta Limited, the Indian multinational mining and metal giant, has achieved a significant financial feat. The company successfully raised over USD 1 billion (INR 8,500 crore) through a Qualified Institutions Placement (QIP), as revealed in a recent stock exchange filing. The QIP, which involved 19.31 crore equity shares, was priced at INR 440 per share, a 4.61 per cent discount to the floor price of INR 461.26 per equity share. This successful issue concluded on July 19.
The QIP, which saw the participation of major players in the investment industry, including the Abu Dhabi Investment Authority (ADIA), Goldman Sachs AMC, Nippon Mutual Fund, SBI Mutual Fund, UTI Mutual Fund, ICICI Mutual Fund, Aditya Birla Mutual Fund, and Mirae Mutual Fund, is a testament to the confidence these investors have in Vedanta Limited's future. Nippon Mutual Fund, for instance, received 9.11 per cent of the total issue size, while Morgan Stanley and SBI Mutual Fund were allotted 8.62 per cent and 7.88 per cent of the issue, respectively.
This capital raise marks a significant financial milestone for Vedanta Limited, bolstering its financial strength and positioning it for future growth and development in the mining sector.
Qualified Institutional Placement (QIP) is a capital-raising tool primarily used in India and other parts of southern Asia, whereby a listed company can issue equity shares, fully and partly convertible debentures, or any securities other than warrants which are convertible to equity shares to a qualified Institutional Buyer (QIB).
Vedanta's chairman, Anil Agarwal, emphasised the growing investor confidence in the company's strategic growth and operational excellence. The funds raised will help de-leverage Vedanta's balance sheet and support the company's near-term goal of achieving $10 billion in EBITDA. The Qualified Institutional Placement (QIP) attracted significant interest from foreign institutional investors, mutual funds, insurance companies, and other investors. The proceeds will also fund Vedanta's various growth projects, including an aluminium smelter and refinery, new oil and gas investments, and expanding its steel and iron ore businesses.
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