Vedanta Ltd, a leading mining conglomerate, has repaid a high-cost USD 900 million loan, achieving a net deleveraging of USD 550 million and bolstering its financial health.

The repayment, executed through a blend of proceeds from a Qualified Institutional Placement (QIP) and a new lower-interest loan, underscores the company’s aggressive debt reduction strategy.

The original loan, secured by subsidiary THL Zinc Ventures in May 2023 at a steep 13.9% interest rate, was partially settled using funds from Vedanta’s USD 1 billion QIP raised in June 2024.

To complete the refinancing, Vedanta secured a USD 350 million facility at 9.6% per annum from JP Morgan and other financial institutions, slashing annual interest expenses by USD 90 million. This new facility also offers improved terms, enhancing the company’s fiscal flexibility.

This move aligns with Vedanta’s broader deleveraging goals. By December 2024, its net debt-to-EBITDA ratio improved to 1.4x from 1.9x in Q1 FY24, edging closer to its medium-term target of 1x. Meanwhile, its parent, Vedanta Resources Ltd (VRL), has trimmed its debt to USD 4.9 billion—the lowest in a decade—down from over USD 9 billion two years ago, reflecting a group-wide focus on balance sheet optimization.

In February 2025, Vedanta raised Rs 2,600 crore through unsecured non-convertible debentures (NCDs) at 9.40-9.50% coupon rates, drawing interest from major institutional investors like ICICI Prudential and Kotak. The refinancing efforts have earned positive responses from rating agencies, with ICRA and CRISIL assigning an ‘AA Rating/Watch with Developing Implications,’ signaling confidence in Vedanta’s trajectory.

This upgrade enhances its ability to tap capital markets at competitive rates. Analysts note that Vedanta’s strategic mix of equity raises, bond issues, and cheaper loans—coupled with robust operational performance—positions it well for sustainable growth.