Business Standard reported that London listed Vedanta Resources will invest another INR 40135 crore towards building its capacity in aluminum, zinc, copper, iron ore and power in India.
With the revival in market conditions, the company has also decided to begin construction of its power project in Punjab which was on hold after the financial downturn.
The first of its major projects completed would be the 500,000 tonne per annum aluminum smelter and associated captive power plant at Jharsuguda in Orissa by the end of this financial year. The investment of INR 9,900 crore for the project has been almost completed. Except a power plant, all the remaining projects would be completed by 2012.
The company in its business review report said that with the improved market conditions and significant Indian GDP growth, the company has reviewed its capital expenditure plan and decided to reactivate its 1,980 MW Talwandi Sabo commercial power project, put on hold 2008. The cost of the project, scheduled to commission by 2014 would be INR 10,000 crore.
Vedanta controls the Konkola Copper Mines in Zambia and Copper Mines of Tasmania, in addition to the controlling stakes in unlisted entities such as Bharat Aluminum Company, Madras Aluminum Company, Vedanta Aluminum and Sterlite Energy. Of this, Sterlite Energy the power generator has recently filed regulatory applications for INR 5,100 crore initial public offering.
Until September, the company had spent INR 35,800 crore for its expansion with a mix of debt and equity. The gross debt stood at INR 32,539 crore up from INR 24,000 crore in March following new convertible debt of INR 5,880 crore raised in July and other smaller debts rose at subsidiary levels to fund the CAPEX requirements.
Despite its higher debt component, analysts noted that the company’s cash reserve of INR 28,000 crore reduces the risks and ensures higher leverage. Besides, the company has already tied for the major chunk of an additional INR 40,000 crore required for completing projects in the pipeline.
(Sourced from Business Standard)
