Anil Agrawal, the Chairman of Vedanta Group, has assured stakeholders that Vedanta Resources Limited (VRL) is financially stable and capable of meeting its debt obligations comfortably. Speaking to The Economic Times on April 25, Agrawal stated that there should be no doubt about the company’s ability to pay its debts, and claims that the recent concerns about the group being over-leveraged are unfounded.
Vedanta’s fiscal robustness has remained steadfast, as affirmed by Agrawal, given that the organization has not dishonored its debts for a quarter century. Additionally, VRL plans to reimburse its outstanding debts via a combination of dividends and royalties, as Anil Agrawal disclosed.
The mining and metal sector is Vedanta Group‘s chief domain, with ancillary firms like Hindustan Zinc, Cairn India, Sesa Goa, and Electrosteel Steels under its wing. Vedanta possesses critical stakes in diverse fields, such as aluminum, oil and gas, steel, copper, and zinc.
Vedanta Group has discharged a $1 billion debt and currently owes $6.8 billion in gross debt. While Vedanta’s payout of dividends may erode its cash holdings, thereby negatively affecting its creditworthiness and upcoming capital expenditure, Agrawal maintains his bullish outlook for the company’s future.
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Vedanta has projected a total gain of $9 billion and a revenue of about $30 billion in the 2023-24 fiscal year, according to the individual in charge. This business has the distinction of being one of the greatest dividend-paying corporations and has just reported its fifth dividend distribution for the fiscal year ending March 28. Nevertheless, certain professionals have voiced doubts that these payments may impair the company’s ability to invest in potential ventures.
In essence, Vedanta Resources Limited is projected to fulfill its debt commitments via a combination of dividends and royalties. While there are misgivings about the impact of the firm’s dividend payouts on its liquidity reserves and creditworthiness, Anil Agrawal is confident about Vedanta’s prospects, claiming that it is financially sturdy and able to satisfy its debt commitments.
