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Metal magnet Anil Agarwal-owned Vedanta has initiated a strategic review of its steel and steel raw materials businesses even as the Group is looking for fresh funds to meet its debt obligations.
In a statement on Friday, Vedanta said it continues to review strategic priorities in the normal course of its capital allocation discussions with an aim maximise stakeholder value.
In this regard, the company has decided to initiate a strategic review of its steel and steel making raw materials businesses, it said.
The review will begin immediately and will evaluate a broad range of options to maximise stakeholder value, including but not limited to a potential strategic sale of some or all of steel businesses. The company has engaged advisors to assist in this review.
Vedanta entered the steel business with acquisition of Electrosteel Steel for ₹5,320 crore in 2018. It had operations in Bokaro, Jharkhand. The company had manufacturing capacity of 1.5 million tonne per annum. The product range of the company includes pig iron, billets, TMT bars, wire rods, and ductile iron pipes.
The company hot metal steel production of 1.37 mt in FY23 and recorded two per cent growth in saleable steel output of two per cent at 1.28 mt.
Enthused by the demand growth, Vedanta announced plans to double the steel-making capacity to three mtpa with an investment of $348 million (₹2,800 crore) last March.
Besides the steel plant, the company has iron mining interest in Karnataka and Goa. Saleable iron ore production in Karnataka was down last fiscal at five million tonne against 5.3 mt achieved in the previous year.
With the suspension of iron ore mining in Goa ban lifted after five years in April, the company acquired Bicholim iron ore mines in Goa through competitive bidding process.
The Group has earlier made attempts to sell assets for raising fund to meet its debt obligations. Hindustan Zinc, the group’s flagship, tried to acquire the international zinc business of Vedanta for $2.98 billion. However, the deal was dropped after government, which owns about 29.54 per cent stake in HZL, opposed the plan.
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