Vedanta trims FY25 interest cost to 9.6%, aims for 9% by FY26: CFO Ajay Goel
Vedanta Optimizes Financial Structure: Interest Cost Reduction and Growth Strategy Analysis
Table of Contents
Vedanta Ltd achieves significant financial optimization with interest costs reduced to 9.6% in FY25, targeting further reduction to 9% by FY26. CFO Ajay Goel outlines the company’s strategic refinancing success and future growth plans.
Financial Optimization Overview
Key Financial Metrics
- EBITDA: ₹43,541 crore (37% YoY growth)
- Net Debt: ₹53,251 crore
- Leverage Ratio: 1.22x (Net debt to EBITDA)
- Target Leverage: 1x by FY26
The company’s focus on leverage metrics rather than absolute debt values demonstrates a strategic approach to financial management in the current growth environment.
Refinancing Strategy and Impact
Interest Cost Optimization
- Current Interest Rate: 9.6% (down from 10.4%)
- Target Rate: 9% by FY26
- FY26 Maturities: $1.7 billion
- Secured Debt Structure
Capital Raising Success
- QIP Raise: $1 billion
- HZL OFS: $0.4 billion
- Pre-growth Capex Cash Flow: $5 billion
Growth Capex and Future Plans
Capex Overview
| Metric | Amount |
|---|---|
| Total Approved Capex | $9.5 billion |
| Already Spent | $5.5 billion |
| Unspent Capex | $4.5 billion |
| FY26 Guidance | $1.5-1.7 billion |
Growth capex remains a strategic choice rather than a necessity, with flexible funding options through internal accruals or loans based on market conditions.
Parent Company Performance
Vedanta Resources Achievements
- De-leveraging: $4 billion reduction over three years
- Bond Coupon Rate: 250 basis points reduction
- Extended Maturities: Up to FY34
- Strengthened Financial Position
The parent company’s successful de-leveraging and maturity extension demonstrate a group-wide commitment to financial optimization and long-term sustainability.
Published on May 4, 2025
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