Anil Agarwal-promoted Vedanta Resources Plc, which targets to become one of the top five metal producers in the world, has chalked out huge investment plans to achieve its goal.
Anil Agarwal, chairman of Vedanta, after raising $1.5 billion through ADS on Thursday, said during a conference call, “We aim to be among the top five metal producers in the world.” However, he did not put a time frame to this.
According to Agarwal, by 2010, the Vedanta Group would be the largest producer of zinc. If the Asarco deal goes through, the group will be the third largest copper producer in the world. Asarco is the third largest copper producer in the US and owns mines holding about 5 million tonne of copper.
“The government needs Rs 25,000 crore to cover up deficit. By disinvesting Hindustan Zinc Ltd (HZL) and Bharat Aluminium Company Ltd (Balco) completely, it would be easily getting Rs 8000 crore. We are ready with the cash. HZL alone has Rs 9,000 crore and is ready with the payment,” he said.
Vedanta is moving ahead to produce 1 million tonne each of copper and zinc-lead, 2.5 million tonne of aluminium and 25 million tonne of iron ore.
Regarding Asarco, the group will not be increasing its bid of $1.87
billion against Grupo Mexico. Vedanta had in the last month increased its offer from $1.7 billion to $1.87 billion.
The London Stock Exchange-listed company is also on its way to make big in the power sector, where it will be spending Rs 50,000 crore in expanding its business. The company had raised $1.5 billion mainly to fund its expansion in power.
Vedanta Group is targeting 11,000mw of power generation by 2012, of which 2,000mw is already being generated with an investment of about Rs 9,000 crore and 4,500mw would be operational by mid 2010 with an investment of Rs 20,000 crore. Another project of 1,980mw will come in Talwandi, Punjab, with an investment of about Rs 8,500 crore. The rest, 2,500mw, will come up by 2012 with an investment of another Rs 8,500 crore.
“Around 50% of the power produced by us would be for commercial purpose and rest for captive use. India has shortage of about 78,000mw of power and it is important for the private sector to come up and produce,” said Agarwal.
He said, “Vedanta is a cash-rich group. We have raised about $8 billion in the last five years and as of today, we have about $6-7 billion.”
Vedanta, which aims to set up 10 million tonne steel plant in Orissa with an investment of about Rs 50,000 crore, is scouting for a JV partner to set up the facility in phases. Meanwhile, rating agency Moody’s on Friday said that Vedanta’s ratings were unaffected by Sterlite’s equity offer.
“The net cash injection at Vedanta of about $1 billion will give the group additional financial flexibility to fund existing expansion plans. Despite this positive impact, Sterlite’s equity offering does not warrant a change in Vedanta’s rating or to its outlook given the latter’s aggressive expansion plans amid the weak operating environment,” said Ivan Palacios, Moody’s AVP/analyst.