Anil Agarwal Pushes Vedanta Restructuring to Cut Debt and Capitalize on Critical Minerals

Indian billionaire Anil Agarwal is nearing the completion of a long-anticipated restructuring of his metals-to-energy conglomerate, Vedanta, in a strategic move aimed at reducing the group’s $11 billion debt and providing sharper focus across its diverse businesses.

Despite the cooling of aluminum, zinc, and copper prices after their 2024 peaks, the 71-year-old tycoon remains confident that simplifying Vedanta’s corporate structure and capitalizing on rising demand for critical minerals will enhance the group’s appeal — even amid global recession concerns.

The demerger plan will result in the listing of Vedanta’s major business units, including aluminum, oil and gas, power, iron and steel, alongside the already publicly traded core entity.

According to Bloomberg Intelligence analyst Mary Ellen Olson, the restructuring could open new funding avenues and improve financial transparency across the group.

“The time for growth is now. Demand is strong, supply is tight, and we’re well-positioned in the right markets,” Agarwal said in a recent video interview from his London residence.

He noted that most of Vedanta’s production is consumed domestically, insulating it from disruptions tied to global trade tensions, such as the tariff measures introduced by former U.S. President Donald Trump.

Vedanta has recently secured mining rights for critical minerals — including nickel, chromium, platinum, and cobalt — through India’s November auctions.

Agarwal views these metals as key drivers of the global energy transition and the next wave of growth for his companies.

Agarwal, who has long aspired to build a globally competitive mining empire on par with giants like Rio Tinto and BHP, is ramping up Vedanta’s overseas investments.

The group is set to invest $2 billion in copper-processing facilities in Saudi Arabia — one of the largest foreign-led projects in the kingdom’s metals sector.

“Saudi not only offers promising geology but also strong domestic demand,” Agarwal said, adding that financing such a project would not be an issue.

According to local estimates, Saudi Arabia holds mineral reserves valued at up to $2.5 trillion, including copper, gold, phosphate, and bauxite.

Vedanta plans to fund about one-third of its investment internally, with the remainder sought through project financing.

In Africa, the company is actively seeking capital to develop mining operations. It controls Zambia’s Konkola Copper Mines, home to major copper and cobalt deposits.

Financing options under consideration include a $1 billion bond, offtake agreements, or the sale of a minority stake to global investors — demand for which Agarwal says is strong.

Vedanta shares have declined around 7% in Mumbai this year, pressured by falling commodity prices and investor concern over the group’s $6.2 billion debt — a result of acquisitions over the past two decades, including Bharat Aluminium and Hindustan Zinc.

Over the past two years, Agarwal has made significant efforts to reduce debt and extend repayment timelines. His goal is to halve Vedanta’s debt over the next three years.

He emphasized that while each newly listed business will pursue growth independently, the parent company will remain cautious about taking on additional leverage.

All current Vedanta shareholders will receive one share in each of the newly listed companies for every share they hold in the parent firm.

Agarwal confirmed there are no plans to sell stakes in any of the demerged units or at the parent level. However, each unit may issue new equity to support expansion.

He added that Vedanta’s debt-to-EBITDA ratio — a key measure of financial health — needs to be reduced from 1.4 to 1 and then maintained at that level.

Agarwal has been preparing his daughter, Priya Agarwal Hebbar, to eventually lead the group. A University of Warwick graduate in psychology and film studies, the 35-year-old currently chairs Hindustan Zinc and sits on Vedanta’s board.

“The group’s future is centered on energy transition and critical minerals,” Hebbar said, “and that is where the company is heading.”