Optimistic of an “exciting journey” ahead, mining major Vedanta, a subsidiary of London-headquartered Vedanta Resources (VRL), has committed to invest $1.7 billion for capital expenditure in FY24.
“We have already invested $1.2 billion in the form of growth capex in FY23 to augment our assets and production. We envisage committing another $1.7 billion in FY24 towards growth projects,” its chairman Anil Agarwal said in the company’s annual report for FY23.
“Vedanta is already expanding its aluminium and zinc capacities. Our oil and gas operations, which account for nearly one-quarter of India’s production, is also diversifying its reserves and resources portfolio towards a vision of contributing 50% to India’s total oil and gas production,” he said, adding, the firm is “envisaging” a greater role in the nation’s growth story and in making India self-reliant for minerals and energy.
Agarwal, in his message to shareholders, said times ahead are “exciting” and the company is optimistic of an exciting journey. “The macroeconomic factors and risks faced by advanced economies going into recession may pose potential challenges to metal demand. Yet, the overall sentiment towards mined commodities is improving as the pace of energy transition accelerates across the globe. Some green shoots are already visible with inflationary pressures beginning to ease and supply chain constraints showing signs of relenting.”
Agarwal added: “These will help to improve profitability and generate robust cash flows.”
Talking about FY23, Agarwal said that VRL, the holding company of Vedanta, has deleveraged $2 billion during the year against its commitment of $4 billion deleveraging over three years. “We have an impeccable track record of honouring all capital market commitments”.
Talking about Indian unit’s performance in FY23, Agarwal said the company operated against a difficult and uncertain macro-environment driven by prolonged geo-political conflict, subsequent energy crisis and aggressive monetary policies adopted by central banks.
Despite this, it posted Rs 1.45 trillion in revenues, he added.
Vedanta’s MD & CEO Sunil Duggal said that the company’s long-term focus is to grow in India, in sync with the country’s “robust” economic and demand growth.
“We see new-age India to be more mineral-intensive. The emphasis on electric mobility, infrastructure creation, renewable energy and efforts to establish India as an electronics hub are all set to enhance demand for key metals and minerals,” he said.
Vedanta is expanding capacities across various businesses, which are in various stages of implementation. Further, projects aimed at achieving raw material security are also being pursued.
“A disciplined capital allocation approach is being followed across all projects to ensure higher returns while maintaining a strong balance sheet,” he added.
Vedanta had convened its AGM on July 12, and the company is seeking shareholders’ approval for re-appointment of directors.