"We are very, very comfortable," said the 69-year-old billionaire in an interview with ET, drawing attention to the company's track record. "In the last 25 years, we have not defaulted even once. There has been disproportionate talk about our debt," he said, adding that VRL would repay its debt through a combination of dividend and royalty payments.
Vedanta Resources' key subsidiary in India, Vedanta Ltd, houses its various businesses across sectors such as aluminium, oil and gas, steel, copper, power and zinc.
Some of the prominent stepdown subsidiaries of the company are Hindustan Zinc, Cairn India, Sesa Goa and Electrosteel Steels, among others.
With the latest debt repayment of $1 billion, Vedanta Resources on Monday said its gross debt stands at $6.8 billion, down from $7.8 billion at the end of March 2023 and $9.7 billion at the end of March 2022.
Brushing aside concerns over piling debt, which includes $2 billion of foreign currency bonds maturing this financial year - some as early as May - Agarwal said the group has a comfortable liquidity position and will be able to meet its obligations within the deadlines.
"We will generate profits of $9 billion on a total revenue of around $30 billion in FY24," he said.
On March 28, the India-listed Vedanta Ltd announced payment of a fifth interim dividend for FY23. The company said it will pay a dividend of Rs 20.50 per equity share, amounting to a total of Rs 7,621 crore.
Analysts have pointed out that successive dividend payouts would leave the group with considerably less cash, which could potentially impact its capital expenditure plans as well as credit worthiness.
Agarwal, however, maintained that the group's business plans remain on track, including the ambitious semiconductor manufacturing joint venture with Taiwan's Foxconn, which is setting up a plant in Gujarat. "The $20-billion project will need around $5 billion in the first phase. Of this, we will be putting in $1.5-2 billion ourselves. We are more than comfortable to fund it," he said.
The chairman said the project will require licensing agreements with multiple technology partners, in which the group is making satisfactory progress.
Agarwal, who founded Vedanta in the 1970s as a scrap trading business, said he wants to leave behind a legacy rivalling that of the Tatas, with a sprawling conglomerate run by professionals.
"As far as my credibility is concerned, 99% people think I am the best. But the 1% people who matter, take a little time (to trust my credibility)," he said. "I dream that in the time to come, this company will be like another Tata Sons - several companies will run, grow and more professional people will run the company. Everybody should have a win-win situation."
(Nehal Chaliawala contributed to the story)
Vedanta very comfortable, concerns over its debt situation misplaced: Anil Agarwal - The Economic Times
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