Vedanta upsizes QIP to $1 billion on back of strong demand

did not respond to ET’s queries.

The company also added that it may offer a discount of not more than 5% on the floor price for the issue. The board of the natural resources major had, in May, approved fundraising of up to Rs 8,500 crore, which then got shareholder approval in June.

The QIP initially aimed to raise $600 million (Rs 5,014 crore), with an option to raise an additional $200 million (Rs 1,670 crore) in case of oversubscription, according to sources. The base issue has seen demand from domestic and international investors at twice the initial amount. As a result, the size has been increased to the maximum approved amount, sources said.

According to sources, , and WhiteOak were among the institutions that are said to have put in bids. Sources added. The proceeds will be used to reduce debt and fulfil certain capital expenditure obligations, said sources.

Citibank, and Nuvama are the bankers for the deal.

Vedanta is currently in the midst of several growth projects and is looking at a long-term capital expenditure of around $8 billion. Its capital expenditure target for the current fiscal is likely at $1.9 billion, up by more than a third from the $1.4 billion it spent last year.

While some of the proceeds of the fundraising will be used to fund the ongoing capital expenditure, some of it may also be used to retire high-cost debt that the company has taken in the past couple of years, a move which could potentially boost profits, said a person familiar with the development.

Vedanta had a net debt of ₹56,338 crore at a consolidated level and a net-debt to operating profit ratio of 1.5 times as of March-end. Its gross debt was ₹71,759 crore, of which 82% was in Indian rupees, and the rest in foreign currency.