Vedanta Aluminium To Raise ₹13,500 Crore Loan From Banks After Business Split

Vedanta Aluminium Metal Ltd, a unit of the Vedanta Group, is planning to raise around ₹135 billion (approximately ₹13,500 crore) through loans from leading banks, marking the first major local-currency borrowing after the conglomerate was split into separate businesses.

The fundraising comes as Vedanta works to strengthen the financial independence of its newly separated entities and reduce debt levels following the restructuring approved by an Indian court.

Banks Extend Loans To Vedanta Aluminium

According to reports, Axis Bank has signed a loan agreement worth ₹55 billion with Vedanta Aluminium Metal Ltd. HDFC Bank and ICICI Bank are expected to provide an additional ₹80 billion collectively.

A portion of the loan will be syndicated among other lenders, with Axis Bank leading the process.

The loans have a tenure ranging between six-and-a-half years and seven years. The funds will primarily be used to refinance existing debt inherited by Vedanta Aluminium from the earlier integrated group structure.

The interest rates offered by banks are expected to be around 7.9%-8%, according to sources. The transaction reflects growing lender confidence in Vedanta Aluminium’s standalone financial position after the restructuring.

Restructuring Improves Financial Flexibility

The Vedanta Group recently separated its businesses into five independent listed companies as part of a restructuring exercise aimed at allowing individual units to operate with greater financial flexibility.

Four companies focusing on aluminium, power, oil and gas, and iron ore began trading separately on stock exchanges in June.

Following the demerger, rating agency Crisil upgraded ratings for several Vedanta entities, including Vedanta Aluminium, whose rating was raised to AA+ with a stable outlook.

The upgrade was attributed to improved financial flexibility and a stronger standalone business structure.

The fundraising also comes amid rising demand for corporate credit in India. Reserve Bank of India data showed bank lending expanded 17.7% to ₹217.3 trillion as of July 15, with credit growth nearly doubling compared with the previous year.