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Vedanta Shares Surge to 14-Year High on Fundraising Plans

Shares of Vedanta Ltd soared to a 14-year peak of Rs 438.30 on the Bombay Stock Exchange Tuesday, surging 6% amid heavy trading volumes. The rally came after the company announced its board will meet this Thursday, May 16, to consider a plan for raising funds. The board will also evaluate declaring an interim dividend on equity shares for the 2024-25 financial year.

Vedanta is currently trading at its highest level since May 2010. The stock had hit an all-time high of Rs 494.30 on April 8, 2010. Over the past two months alone, Vedanta’s share price has appreciated by an impressive 75%.

In a regulatory filing, the company stated the board will deliberate on various fundraising strategies, including the issuance of new equity shares or other convertible securities.

Earlier this month, Vedanta Group Chairman Anil Agarwal announced plans to invest $20 billion across the group’s businesses in India over the next four years. The investments will focus on technology, electronics, glass, and the group’s other existing operations, according to reports.

Vedanta Ltd, a subsidiary of Vedanta Resources, is a global diversified natural resources company with major operations in oil & gas, zinc, lead, silver, copper, iron ore, steel, nickel, aluminum, power, and glass substrates. It has a significant presence across India, South Africa, Namibia, Liberia, UAE, Korea, Taiwan, and Japan. The company is also venturing into electronics and display glass manufacturing.

Analysts expect Vedanta’s consolidated operating profitability (EBITDA) for fiscal 2024 to be around Rs 34,500 crore (~Rs 35,250 crore in FY23). This outlook factors in reduced cost pressures, healthy utilization rates across key segments, and recent gains from an arbitration award in the oil & gas business, despite modest commodity prices and slower-than-expected capital expenditure progress in aluminum.

In FY24, Vedanta reported its second-highest ever annual revenue of Rs 1.42 trillion and EBITDA of Rs 36,455 crore with a 30% margin. This strong performance was driven by total cost optimization of about Rs 10,000 crore year-over-year, despite a moderate commodity cycle.

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