Mining conglomerate Vedanta Ltd has a pipeline of more than 50 active projects and expansions to drive growth, which is expected to generate incremental revenue of over USD 6 billion and incremental USD 2.5-3 billion of annual EBITDA upon completion, a top company executive said at an investor event.
These growth initiatives, which the company categorises into the 'Discovery' stage, 'Concept' stage and 'Execution' stage, are spread out across all Vedanta's business segments - aluminium, zinc, base metals, steel, copper and power.
"We continuously explore options to create additional value at all our sites. We currently have several high-impact projects in execution mode, across all our businesses. These will further contribute to our cost leadership, while substantially increasing our operating capacities. These levers will help drive our EBITDA towards the stated target of USD 7.5 billion annually," the company's vice chairman Navin Agarwal said at the event.
Vedanta is expecting a group EBITDA (earnings before interest, taxes, depreciation, and amortization) of USD 5 billion on revenue of USD 17.5 billion in the current fiscal ending March 31.
Some of the significant projects due for immediate commissioning include a refinery expansion at the Lanjigarh Aluminium facility, which will take its capacity from 2 million tonnes per annum to 5 million tonnes, a 1 million tonnes a year expansion at BALCO, commissioning of the Athena and Meenakshi power plants with an aggregate capacity of 2.2 GW that will take the commercial power portfolio to 5 GW, capacity expansion at Gamsberg Zinc facility to deliver 5,00,000 tonnes MIC, and becoming India's largest ferro-alloys producer with 5,00,000 tonnes a year capacity.
The pipeline of growth projects and initiatives represents the steps that Vedanta is taking towards meeting its ambitious guidance on annual EBITDA, which has been projected to reach USD 7.5 billion in the near term. The group has guided towards an EBITDA of USD 6 billion in FY25, representing a growth of nearly 35 per cent year-on-year.
Billionaire Anil Agarwal-owned Vedanta has a unique portfolio of assets among Indian and global companies with metals and minerals - zinc, silver, lead, aluminium, chromium, copper, nickel; oil and gas; a traditional ferrous vertical, including iron ore and steel; and power, including coal and renewable energy; and is now foraying into the manufacturing of semiconductors and display glass.
The company on September 29, 2023, had announced the creation of independent verticals through the demerger of underlying companies, mainly its metals, power, aluminium, and oil and gas businesses to unlock potential value. As part of the vertical split of Vedanta Ltd, shareholders will get one share of each of the five newly-listed companies for every one share of Vedanta. After the demerger, the businesses of Hindustan Zinc as well as the display and semiconductor manufacturing units will remain with Vedanta Limited.
"The demerger is expected to simplify the Group's corporate structure with sector-focused independent businesses. Each of our businesses are at global scale hence the board decided to go for a demerger. We intend to build an asset ownership and entrepreneurship mindset where each company would chart out its growth trajectory.
"The demerger will give global investors, including sovereign wealth funds, retail investors, and strategic investors, direct investment opportunities in dedicated pure-play companies. With listed equity and self-driven management teams, the demerger would also provide individual units a platform to pursue strategic agendas more freely and better align with customers, investment cycles, and end markets," Vedanta had said in its demerger announcement.
