Vedanta sells dollar bonds after a brief pause due to market volatility

Vedanta

Vedanta Resources Ltd. priced its third dollar-bond sale in two months, with Monday’s deal occurring just days after the US indictment of Adani Group founder Gautam Adani.

A unit of Vedanta, a London-based mining company with most of its operations in India, sold $800 million of callable notes in 3.5- and 7-year tranches. Vedanta plans to use the proceeds from the current offering to refinance outstanding bonds due in 2028, according to people familiar with the matter who asked not to be identified.

Vedanta, controlled by Indian billionaire Anil Agarwal, paused the deal last week amid market volatility after the Adani indictment. That conglomerate, which has denied the bribery allegations in the case, itself scrapped a dollar bond sale priced just hours before the indictment became public.

Both tranches of Vedanta’s recent offering tightened 12.5 basis points from their initial pricing at 10.25% and 11.25%, receiving combined orders of over $1.19 billion, the people said.

Demand was less than twice the issue size, in line with its bond sales recently: Its 5-year, $900 million callable debt in September received more than $1.45 billion of bids, while those for a $300 million tap of the same security in October exceeded $500 million. The debt priced at 10.875%.

Still, Vedanta going ahead with its offering shows confidence in its prospects. The company extended due dates on some of its dollar bonds in January, seeking to improve its capital structure and overall financial position. That was in addition to the bond sales in the last two months.

Investors have rewarded the moves so far. Vedanta Resources Finance II Plc’s notes due in April 2026 have climbed nearly to par after touching a low of about 60.4 cents in January, according to data compiled by Bloomberg. With a 77% gain this year, the notes are one of the best-performing junk bonds in Asia.