EdelGive Hurun ranks Vedanta's Anil Agarwal among top India philanthropists

 Vedanta chairman Anil Agarwal has been ranked among the top philanthropists in the country, according to the EdelGive Hurun India Philanthropy List 2020.

Agarwal’s contribution this year has risen by 90 per cent compared to the previous year and has ranked him among the top five philanthropists in India, said the report.

Vedanta has contributed more than the government-mandated 2 per cent towards corporate social responsibility, it said.

The report includes cash and cash equivalents pledged with legally binding commitments for the twelve months from 1 April 2019 to 31 March 2020 and the latest available CSR data filed with the Ministry of Corporate Affairs.

Vedanta has been at the forefront of the fight against Covid-19 and contributed Rs 101 crore to the PM-CARES Fund. The company also created a special corpus of Rs 100 crore for Covid-related initiatives to support daily wage earners and local communities.

In line with his philosophy of Giving Back, Agarwal has pledged 75 per cent of his wealth for social good. He has created the philanthropic arm of the Group - The Vedanta Foundation - with a deep-seated belief that businesses must give back to the society and help people prosper.

“The foundation works towards education and computer literacy, vocational training, women and child empowerment, and community welfare,” the Hurun report said.

EdelGive Foundation has partnered with Hurun India towards creating this report to understand philanthropic engagements in the country.

Vedanta board to meet on Saturday to consider first interim dividend

 

Mining conglomerate Vedanta Ltd on Thursday said its board will meet this week to consider and approve the first interim dividend for the current financial year.

The record date for the purpose of determining the entitlement of the equity shareholders for the said dividend, if declared, is being fixed as Saturday, October 31, 2020, Vedanta Ltd said in a regulatory filing.

"The Board of Directors of the company on Saturday, October 24, 2020, will consider and approve the first interim dividend on equity shares, if any, for the financial year 2020-21,"the company added.

On October 10, Vedanta Ltd announced that its voluntary delisting offer -- to acquire the balance shareholding in Mumbai-listed Vedanta Ltd and then delisting it from the stock exchange -- had failed at the reverse book building stage.

The total number of shares tendered by Vedanta Ltd's public shareholders fell 7 per cent short of the mandatory minimum 90 per cent for successful delisting.

Earlier this week, Vedanta Group firm Hindustan Zinc Ltd (HZL)had declared its highest interim dividend in 12 years at Rs 21.3 per share.The record date for paying the dividend is October 28. Hindustan Zinc had paid a higher dividend of Rs 30 per share in July 2008.

All about Vedanta's 'failed' delisting plan and what investors should do

 

On May 12, 2020, billionaire Anil Agarwal announced the intention to take his Indian listed firm Vedanta Ltd private by buying out shares held by the public. The company had said that Agarwal-controlled Vedanta Resources, the promoter of the company, will offer Rs 87.5 per share to nearly 49 per cent public shareholders of Vedanta Ltd to execute the delisting plan.

However, the delisting price did not go down well with the analysts who criticized the company for keeping the price so low against its fair value.

According to a report by Business Standard dated May 14, analysts had said the indicative price announced by the promoter firm Vedanta Resources (VRL) would have to be significantly raised.

Now, What is the outlook of the stock and what investors should do now?

Vedanta tanks 15% on heavy volume; logs sharpest intra-day fall since March

 

Shares of Vedanta clocked their sharpest intra-day fall in over six months, tanking 15 per cent to Rs 117.60 in the intra-day trade, on the BSE on Wednesday on the back of heavy volumes. Earlier on March 23, 2020, the stock had plunged 18 per cent in the intra-day trade, exchange data show.

At 02:17 pm, the stock was trading 9 per cent lower at Rs 125.65, as compared to 0.89 per cent rise in the S&P BSE Sensex. Trading volumes on the counter jumped over six-fold. Till 02:18 pm, a combined 91 million equity shares, representing 2.6 per cent of total equity of Vedanta, had changed hands on the NSE and BSE.

Vedanta's delisting offer through the reverse book-building process began on Monday, October 5, 2020 and will close on Friday, October 2020. The indicative floor price for the bidding process has been set at Rs 87.25 per share.

The promoter holding in Vedanta is currently at 50.14 per cent. Under Sebi's delisting regulation, the promoter will have to acquire at least 39.86 per cent stake (1.48 billion shares) from public shareholders to ensure that the delisting bid is successful.

Vedanta Group said that delisting of Vedanta is the next logical step in this simplification process and will provide the Group with enhanced operational and financial flexibility in a capital intensive business.

"While Vedanta reported a relatively steady performance for April-June quarter (Q1FY21), a quarter marred by shutdowns, the stock price performance will largely hinge on its delisting related news flow," ICICI Securities said in a note.

The last date for counter offer (if any) is October 13, 2020 while the last date of price discovery is October 16, 2020. The proposed date of payment of consideration to shareholders and/or return of equity shares to shareholders in case of bids not being accepted/failure of delisting offer is October 23, 2020. As per media reports, the parent company Vedanta Resources has mobilised US$3.15 billion for the proposed delisting exercise.

Vedanta profit rises 49% to Rs 2,348 cr in Q3 on the back of lower expenses

The company had posted the profit of Rs 1,574 crore in the October-December period of the previous financial year, Vedanta Ltd said in a filing to the BSE.

The profit is "attributable to owners of Vedanta Ltd", the filing said.

In a statement, the company said "attributable PAT (was) at Rs 2,348 crore, up 49 per cent y-o-y (year-on-year)".

However, the company had posted a decline in consolidated income at Rs 22,007 crore in the October-December period, over Rs 25,067 crore in the year-ago period.

The company's consolidated expenses, however, declined to Rs 18,369 crore as against Rs 21,589 crore in the year-ago period.

"We remain on track to become the world's largest long-life integrated zinc-lead-silver producer in two years while maintaining our cost leadership. Our aluminium business continues to benefit from improved integration and systemic cost improvements," Vedanta Ltd Chief Executive Officer Srinivasan Venkatakrishnan said.

The company said revenue was 3 per cent lower on a quarter-on-quarter basis, primarily due to lower volumes in the oil and gas business.

"Revenue was three per cent lower on Q-o-Q basis, primarily due to lower volumes in oil and gas business, partially offset by higher volumes in iron ore and steel, zinc India and aluminium business coupled with past exploration cost recovery in oil and gas business," the statement said.

The company's net debt stood at Rs 23,384 crore in the quarter, higher by Rs 3,303 crore as compared to that in the September 2019 quarter.

Vedanta on Friday announced the acquisition of Ferro Alloys Corporation Ltd (FACOR) for a total consideration of Rs 280 crore.

FACOR is in the business of producing ferro alloys and owns a ferrochrome plant with a capacity of 72,000 tonnes per annum, two operational chrome mines and 100 megawatts of captive power plant through its subsidiary, FACOR Power Ltd.

The consideration will be payable under the approved resolution plan on a debt and cash-free basis.

The portion of payable cash is Rs 10 crore and the rest Rs 270 crore face value in the form of zero coupon, secured and unlisted non-convertible debentures payable to the financial creditors payable equally over four years commencing March 2021.

Vedanta Q3 PBT at Rs 3,806 cr, up 9.4% on lower costs, exceptional gain

Anil Agarwal-led Vedanta Ltd reported a consolidated profit before tax of Rs 3,806 crore in the December quarter, up 9.4 per cent from same period last year on the back of lowered costs and a small exceptional gain of Rs 168 crore.

Net sales of the company declined 10 per cent on a year-on-year basis to Rs 21,126 crore in the period under review primarily due to lower commodity prices and muted volumes in zinc, oil & gas and copper business, partially offset by exploration cost recovery in oil & gas.

Lower cost of production mainly in aluminium lent firm support to the total expenses of the company in the quarter gone by which declined 15 per cent in December quarter from same period last year.

"Our aluminium business continues to benefit from improved integration and systemic cost improvements. Our cost of production has started to slide and was at $1,691 per tonne in December quarter. We are on track to bring it lower at the target of $1,500 per tonne as in January itself, the aluminium cost of production has fallen below $1,600 already," informed chief executive officer, Srinivasan Venkatakrishnan.

Drop in power and fuel costs also helped lower expenses in turn pushing up operating margins.

“The exceptional item gain is the claim we have made as part of the unsuccessful exploration that has taken place during our oil&gas explorations. This facility provided by the government is indeed encouraging in risk capital,” G.R. Arun Kumar, executive director (Vedanta Ltd) and group chief financial officer said at the earnings concall today.

The company’s consolidated net profit stood at Rs 2,665 crore in December quarter, up 14 per cent from same period last year.

As per Bloomberg estimates, the company’s bottomline was seen at Rs 720 crore, while the topline was expected to be at Rs 20,223 crore in the December quarter.

Vedanta reported an earnings before interest, taxes, depreciation and ammortisation (EBITDA) at Rs 6,531 crore in the quarter gone by, up 10 per cent from same period last year. The EBITDA margin in the period under review stood at 34 per cent as against 29 per cent in the same period last year.

The company today also announced acquisition of Ferro Alloys Corporation Limited (FACOR) for a total consideration of Rs 280 crore. The acquisition will complement the company’s existing steel business as the vertical integration of ferro manufacturing capabilities has the potential to generate significant efficiencies, said Vedanta in its release.

As on 31 December 2019, company's gross debt was at Rs 58,589 crore, up by Rs 2,691 crore as compared to September 2019. This was mainly due to the increase in temporary borrowing at Zinc India and term debt at Oil & Gas partially offset by debt repayment at Vedanta standalone.

Vedanta implements resolution plan to bag Ferro Alloys via NCLT route

Anil Agarwal-led Vedanta Ltd on Friday said it is implementing the resolution plan for the acquisition of insolvent Ferro Alloys Corporation Limited (FACOR) approved by the Cuttack bench of National Company Law Tribunal (NCLT).

The consideration payable for the acquisition of FACOR on debt and cash free basis under the approved plan stands at Rs 10 crore. Alongside, an equivalent cash balance in FACOR’s subsidiary, FACOR Power Limited (FPL) is also payable upfront having zero coupon, secured and unlisted Non-Convertible Debentures (NCD) of aggregate face value of Rs 270 crore to the financial creditors payable equally over four years commencing March 2021.

Vedanta Limited will acquire management control and as per approved resolution plan as it will hold 100 per cent of the paid-up capital of FACOR, Vedanta said in a regulatory filing.

Through the NCLT route Vedanta Ltd had recently acquired insolvent Electrosteel Ltd.

FACOR owns a ferro chrome plant with capacity of 72,000 tonne per annum, two operational chrome mines and a 100 MW captive power plant through its subsidiary, FACOR Power Limited (FPL). The chrome plant and the mines are located in Orissa and its turnover in FY 2019 stood at Rs 580 crore.

The acquisition will complement Vedanta’s existing steel business as the vertical integration of ferro manufacturing capabilities and has the potential to generate significant efficiencies that will help Vedanta increase steel business portfolio, said the release.

Vedanta set to invest Rs 60,000 cr in India over 3 yrs, promises more FDI

Vedanta Resources Chairman Anil Agarwal on Monday said the company is planning to invest around Rs 60,000 crore in the next 2-3 years.

The company is also eyeing a top line of USD 30-40 billion and a bottom line of USD 10 million in 4-5 years, Agarwal said at the India Economic Conclave 2019.

"I am committed to India. I have already invested USD 35 billion in India in the past 10 years. I have bought 13 companies so far including Hindustan Zinc, Balco, Sesa Goa and Cairn and all of them are doing well. I hope to invest Rs 60,000 crore in the next 2-3 years," he said.

However, he did not give further details on how the company plans to utilise the funds, but hinted at being keen on acquiring a few public sector companies.

"We currently have the best in class assets and we are looking at many more nationalised companies. I want to tell the government that it should not depend on foreigners but depend on us. They (foreign investors) want to make money but we want to make the country. If government depends on us we will also bring in foreign investment," Agarwal added.

He also said the company is keenly looking at the glass and optical fibre and cable industries.

"Sterlite Tech is doing a good work in optical fibre. I am now keen on developing the glass industry which will be used in electronics. We are developing the glass used in mobiles, TV sets and computers in countries like Korea, Taiwan and Japan. If the atmosphere in India is conducive we will get to do that here as well. This will give a boost to the electronics industry," he added.

When asked about the growth the company foresees by 2024-25 he said, "we are hoping to have a USD 30-40 billion of revenues and a profit of USD 10 million."

He further said as a part of his commitment to the country the intent was to take care of 10 crore children and 5 crore women and give back 75 per cent of wealth to the society.

"I am committed to India and the company has already paid Rs 2 lakh crore in tax in the last 6 years. This contribution is however very small," Agarwal added.

Vedanta's alumina cost hits two-year low on availability of coal, bauxite

Enhanced availability of coal from linked mines as well as peak output from its captive Chotia block has helped Vedanta achieve cost competitiveness in manufacture of alumina.

By the end of June this year, Vedanta’s cost of alumina at Odisha’s Lanjigarh refinery fell to a two-year low of $284 per tonne, a drop of 17 per cent year-on-year (y-o-y). In volume terms, the alumina production was the highest ever, showing a spike of 37 per cent y-o-y.

Vedanta’s Chotia coal block in Chhattisgarh operated at peak capacity of 1 million tonne per annum. Also, the materialisation of linked coal improved from 66 per cent in FY19 to 72 per cent at the end of Q1FY20. In Q1FY19, Vedanta barely managed to secure coal materialisation of 49 per cent, the company’s investor presentation showed.

Higher local bauxite sourcing also aided Vedanta’s efforts to prune Cost of Production (CoP) of alumina. Under a long-term linkage arrangement with the Odisha Mining Corporation (OMC), Vedanta is sourcing 70 per cent of the bauxite extracted from the former’s commercial bauxite mine at Kodingamali mine. The bauxite feeds Vedanta’s alumina refinery at Lanjigarh installed at the foothills of the bauxite laden, but ecologically fragile Niyamgiri mountain range. The remaining 30 per cent of OMC’s production is offered to bidders at bauxite auctions conducted twice a year.

Vedanta is currently working on the ramp-up of the Lanjigarh refinery. The expansion is planned in a staggered manner with the first phase envisaging expansion of capacity to 2.7 million tonnes per annum (mtpa) and then scaling it up to 4 mtpa before the final peak rated capacity of 6 mtpa. The capacity upgrade will cost Vedanta Rs 6,400 crore.

Apart from stepping up local bauxite sourcing, Vedanta is also securing its overseas supplies. The Anil Agarwal-led Vedanta has already inked an agreement with Emirates Global Aluminium (EGA) for importing four million tonnes of alumina each year.

EGA’s wholly-owned subsidiary Guinea Alumina Corporation (GAC) is building a bauxite mine and associated export facilities in Guinea, in one of the largest greenfield investments in the country in the past 40 years. Much of Guinea’s bauxite is of the highest quality.

Moreover, in order to achieve long-term bauxite security, Vedanta also aims to bid for the upcoming bauxite blocks to be opened up for online auctions in Chhattisgarh, Jharkhand and Odisha.

Auto slowdown has no decipherable impact on Vedanta's performance: CEO

As aluminium producers face headwinds like soft LME prices, soaring imports and slowing domestic demand from some end use industries, Vedanta is focusing on reducing costs and ramping up portfolio of value added products. Ajay Kapur, CEO (aluminium & power), Vedanta Ltd, talks to Jayajit Dash about Vedanta’s mid-term vision to cut aluminium cost to $1500 per tonne, pioneering production of primary foundry alloy, setting up a hot metal park and the push to exclude aluminium products from the ambit of RCEP. Edited excerpts:

Vedanta has set a target to contain its aluminium production cost to $1500 per tonne. By when and how will you achieve it?

While reducing the cost of production to $1500 per tonne is our mid-term vision, we have given a guidance of $1725 to $1775 per tonne for the current fiscal and are on course to achieving it. The costs in the aluminium industry are primarily driven by the cost of raw materials – alumina, bauxite and coal. We are focused on unlocking operational efficiencies and controlling the cost drivers to ensure lower production cost. Accordingly, we have secured robust long-term contracts for bauxite with global suppliers along with the domestic ones. Our world-class refinery at Lanjigarh in Odisha, which converts bauxite ore to alumina, also helps control costs. We also maintain a healthy inventory at our plants to neutralize any supply-side exigencies.

LME aluminium prices are hovering around $1700. What does this mean for domestic aluminium producers? Do you think global aluminium prices will strengthen in the near term?

The global economy has been volatile over the past quarters owing to several uncertainties globally and escalating trade wars. LME prices reflect these global trends as well. Like every commodity, we expect LME to rebound. It is important to bear in mind that aluminium is the second-most important metal in the world and finds critical applications in key sectors. From that standpoint, the demand for aluminium will only surge. Its light weight, recyclability, corrosion-resistance and versatility as a green metal make it the metal of the future. As the country’s leading aluminium producer, we are well-positioned to capitalise on this opportunity.

The country’s aluminium consumption has taken a hit due to slowing demand from end-user industries. How does Vedanta plan to overcome it?

Aluminium is a metal of strategic importance for the country and is important to nation building. India's aluminium demand grew at 10 per cent in 2018-19, fuelled by the GDP growth and the growth of aviation, automobiles, infrastructure and electrical sectors. Some amount of headwind in the economy is to be expected. Businesses such as ours that take a long-term view are equipped to take these in our stride. As India strides towards her ambition of becoming a $5 trillion economy, consumption patterns will grow, and with it, aluminium consumption is bound to grow. Today in India, per capita consumption of aluminium is at just 2.5 kg, while the world average is 11 kg and in China it is 24 kg. However, over the next five years, India’s demand for aluminium is expected to reach over 7 million tonnes at double-digit growth rates. The Indian primary aluminium producers have currently invested over Rs 1.2 trillion to enhance aluminium production capacity to four million tonnes per annum (mtpa) in the country to cater to the increasing demand. Vedanta proposes to address this through a versatile product portfolio, new product development and innovation. Vedanta has invested in development of high-quality value-added products. As a result, Vedanta now has a wide range of offerings consisting of wire rods, billets, primary foundry alloy (PFA), rolled products and ingots and is a leader in most of these product categories. The PFA for instance, is being produced only by Vedanta in the country, and was imported till we did so. Wire rods are mainly used in electrical application. Billets cater to the buildings and construction sector, transport sector and consumer durables sector. Primary Foundry Alloys (PFA) find major application in automotive industries for making alloy wheels. These value-added aluminium products effectively take Vedanta a step closer to the end customer in the value chain and are enabling the company to fetch better product premiums.

How has the slump in the automotive sector and subdued economic growth affected your sales performance? Will it have any bearing on your gross revenues and profitability?

The automotive sector in India has been facing a slowdown over the past months, but they usually operate through long-term contracts through their ancillary units. Vedanta has limited exposure to the automotive sector in India and the slowdown has no decipherable impact on Vedanta’s sales and performance.

Flat-rolled aluminium products are gaining traction with a consensual forecast that it will be in the growth territory through 2025. Does Vedanta intend to branch out into this segment?

The usage of aluminium flat rolled products defines the degree of sophistication of an economy. Flat rolled products cater to a niche market in India as of now, but that is also evolving. As our economy matures, the consumption of flat rolled products will increase in India over the years. Vedanta already maintains a presence in rolled products segment through its 70 kilo tonne facility at its BALCO smelter in Chhattisgarh.

How do you plan to expand your downstream/ valued-added products portfolio?

Currently, value-added products form nearly 45 per cent of our sales mix, but we plan to take it further. Vedanta is working with various stakeholders of the value chain like auto-industry players, façade manufacturers, extruders and rolling aluminium customers for advanced R&D and production of customised aluminium alloys which can cater to industry-specific needs in the aspects of strength and specialised functions. The company has already started working with all top automobile original equipment manufacturers (OEMs) over the last few months for the supply of primary foundry alloy. The company is in talks with the Odisha government to put up a hot metal park in Jharsuguda, in the vicinity of our smelter, which is also one of the biggest aluminium smelters in the world outside China. The plan is at an active discussion stage. So, in a nutshell, we are rapidly moving up our product portfolio into value-added products.

The deluge of cheaper aluminium imports and the ongoing RCEP negotiations have unnerved aluminium companies. Have you got any favourable response from the government on duty structure?

This year, ahead of the Regional Comprehensive Economic Partnership (RCEP) meeting, the aluminium producers have asked the Commerce Ministry to protect the industry from cheaper imports by excluding aluminium from tariff reduction commitments in the RCEP negotiations. The industry is basically requesting for a relook at the FTA, specifically for a strict Rules of Origin criterion that is needed to check cheaper imports into India. The industry is also requesting the inclusion of aluminium and all its products in the negative list of imports under RCEP. We have been assured by the government that they will give due consideration to the matter.

Vedanta Aluminium has achieved highest production figures and has emerged as a leader in production terms. How do you intend to exploit this position and chart future course?

Vedanta’s aluminium business is the largest producer of aluminium in the country. In FY19, Vedanta Aluminium clocked 1.95 mt (million tonnes) production, logging 17 per cent growth year-on-year. This is, I’m told, the highest ever production by any company in the history of India. The biggest reason for this achievement is the way the business has ramped up its capacities at its smelters at Jharsuguda and BALCO and at its alumina refinery at Lanjigarh (Odisha) by bringing in operational efficiencies. But more importantly, this landmark achievement will take Vedanta a step closer to becoming a trusted partner of the government. Supporting the government to enable India attain self-sufficiency is one of our key business priorities. Self-sufficiency in aluminium production is vital to national security as the metal finds applications in key industries such as aerospace, defence, transportation, building and construction, space exploration, electrical distribution etc that also support the government’s visionary initiatives such as Make In India, Smart Cities, Power for All etc. We want to help build India’s domestic aluminium sector and position it as one of the global leaders with substantial contribution to the country’s economic growth.

Vedanta to seek court order saying Zambia's ZCCM breached shareholder pact

Vedanta, in the middle of a dispute with the Zambian government over its Konkola Copper Mines (KCM) business, said it would seek an interim court order declaring that Zambian firm ZCCM had breached the terms of KCM's shareholders' agreement.

"Vedanta will seek an interim court order declaring that ZCCM has breached the KCM Shareholders' Agreement by pursuing winding-up proceedings against KCM in Zambia, and directing ZCCM to withdraw those proceedings," Vedanta said in a statement.

Vedanta said an urgent application had been served on ZCCM and a provisional liquidator appointed for KCM.

Electrosteel in expansion mode, eyes 10 mt capacity in 5-6 years

Vedanta-led Electrosteel Steels is eyeing a capacity of 10 million tonnes (mt) in the next five to six years through organic and inorganic options.

Electrosteel’s 1.5-mt capacity greenfield plant in Jharkhand’s Bokaro will be scaled up to 3 mt over the next two years in the first phase of expansion. It is likely to cost Rs 4,000-5,000 crore.

Pankaj Malhan, deputy chief executive officer, said other phases were also being planned. While the ramp-up from 3 mt to 6 mt will happen at Bokaro, for the next phase, the company could look at setting up a greenfield project at some other site or consider an acquisition. Typically, the cost of setting up a greenfield plant of 1 mt capacity is $1 billion.

“We are evaluating options for locations. It could be in West Bengal or the South. It could also be an acquisition,” said Malhan.

For the second phase of expansion to 6 mt, Electrosteel has land at the existing location. The company has about 2,000 acres, of which around 900 acres is currently being utilised. But for the subsequent phase, it would have to consider other sites.

Electrosteel had a planned capacity of 2.5 mt, but the commissioned capacity was 1.5 mt.

The growth plans are in sync with Vedanta’s goal of making it one of the top three players in the industry. That’s the plan on a long-term basis, said Malhan. Vedanta acquired Electrosteel through the Insolvency and Bankruptcy Code last year.

In eight months, Electrosteel turned profit after tax (PAT)-positive, said Malhan. In 2018-19, Electrosteel’s PAT stood at Rs 284 crore.

The synergies of being part of a large group like Vedanta — a globally diversified natural resource company — are also playing out. The synergies stood at $30 million, said Malhan.

On Wednesday, Electrosteel launched its rebranded steel portfolio — TMT bars, wire rods, ductile iron pipes, billets, and pig iron. Malhan said that Electrosteel was the first steel company to brand wire rods.

However, as the company is charting out its growth trajectory, in the second phase of expansion, it is likely to move to flat products. The products would include hot-rolled, cold-rolled coil, and galvanised.

The finishing touch to Electrosteel’s makeover may be completed with a name change. Malhan said the board would decide, but something should happen in the next three to six months.