Vedanta Resources To Become A ‘Zero Debt’ Company: Vedanta Founder

Vedanta Group has pledged to turn ‘Vedanta Resources’ into a “net zero debt” company within 2-3 years. It has already paid off $3bn of its debt since February 2022.

Mining conglomerate Vedanta, led by Anil Agarwal, has announced plans to become a “net zero debt company” within the next two to three years. 

Agarwal stated that the group has “ample cash flow” to service all of its debt repayment obligations and added that concerns about debt servicing ability were “absolutely irrelevant”. 

He said that Vedanta’s total debt stands at $13bn and the company is set to make a $9bn profit next year on revenue of $30bn. 

The cash flows are reportedly sufficient to meet all debt servicing obligations. The group has reduced its debt by $3bn since announcing its intention to accelerate deleveraging in February 2022. 

Vedanta has invested $35bn in India so far and plans to become a $100bn company by 2030. 

It is also set to diversify into semiconductor and display fabs, and has signed an initial agreement with Apple supplier Foxconn to establish a manufacturing facility in Gujarat. 

At present, India is entirely dependent on imports for fabs and semiconductors, and domestic consumption is expected to exceed $80bn by 2026 and reach $110bn by 2030.

A net zero debt company is a company that has no outstanding debt or liabilities. It means that the company has enough cash flow to meet its financial obligations without having to borrow money.

Many companies want to become a zero debt company. Having no debt reduces the company’s financial risk and increases its financial stability. 

It also allows the company to have more financial flexibility and invest in growth opportunities without worrying about debt repayment obligations.

Being a zero debt company can improve the company’s credit rating. It makes it easier and cheaper to borrow money if necessary in the future. It can also increase investor confidence in the company’s financial health and stability.

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