HomeBUSINESSVedanta will not prune to $2 bn target for FY23. Here's why

Vedanta will not prune to $2 bn target for FY23. Here’s why

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Vedanta does not plan to squeeze its capital expenditure target of $2 billion for the current financial year FY23 despite a decline in metal prices. On the CAPEX target, Vedanta’s Chief Executive Officer Sunil Duggal on Wednesday said, the company cannot stop the project and these are all brownfield projects that are expected to give good returns.

For the current fiscal, Vedanta has announced a $2 billion CAPEX in its zinc, oil and gas, and aluminium businesses.

While talking to reporters on the side-lines of the second day of the conference on the Indian minerals and metals industry organised by NMDC and FICCI, Duggal said, “We are going ahead (with the CAPEX target for the current fiscal). We cannot stop the project in between and these are all the brownfield projects where the returns are very good and this will make our operation more effective, more productive, more efficient,” reported PTI.

On the decline in metal prices, the CEO cited various geopolitical events as the reason. When asked whether the metal prices will rise in the coming days, Duggal said, if the fundamentals are strong than naturally, the prices are going to go up.

During Vedanta’s 57th annual general meeting, Chairman Anil Agarwal told shareholders that the company planned a CAPEX of $3 billion over the next two years for growth and vertical integration.

Of the $3 billion CAPEX, $ billion expenditure has been set for FY23.

Further, Duggal also shed some light on the open offer of its arm Hindustan Zinc. Replying to a question on whether Vedanta will participate in the open offer, the CEO revealed that “as per the law we cannot acquire more than 5% of the stake and 25% of the stake sale at any point of time.”

Vedanta aims to become a $100-billion (around 8 lakh crore)company in another eight years from the current $18 billion (around 1.3 lakh crore).

In the annual report for FY22, Agarwal said, “In line with India’s Net Zero ambition, we can foresee a strong demand for renewable energy infrastructure and transition to material-intensive growth. This will lead to an automatic increase in demand for materials such as aluminium and zinc, which form part of Vedanta’s core portfolio.”

On BSE, Vedanta shares closed at 266.65 apiece up by 1.62%. The company’s market valuation is around 99,119.05 crore.

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