Vedanta Limited · NSE:VEDL
Vedanta — Merger or Acquisition (September 2023)
52 slides from Vedanta's merger presentation, Sep 29, 2023
Slide 1: Intimation under Regulation 30: demerger announcement
VEDL/Sec./SE/23-24/112 September 29, 2023 BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers “Exchange Plaza” Dalal Street, Fort Bandra-Kurla Complex, Bandra (East), Mumbai - 400 001 Mumbai – 400 051 Scrip Code: 500295 Scrip Code: VEDL Sub: Intimation under Regulation 30
Slide 2: Cover letter signature
The disclosure as required under Regulation 30 of SEBI Listing Regulations read with SEBI circular SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated July 13, 2023 is enclosed as Annexure A. The meeting commenced at 03:15 PM IST and concluded at 04:20 PM IST. We request you to kindly take the above informat
Slide 3: Vedanta announces demerger of diversified businesses unlocking significant value
Vedanta announces demerger of diversified businesses unlocking significant value • To create world-class sector leading companies driving next phase of growth • Capitalizes on India and the world’s growing demand for commodities, energy and technology 29 September, 2023, New Delhi / London: Vedanta
Slide 4: Rationale for Demerger
Rationale for Demerger: 1. Simplifies Vedanta’s corporate structure with sector focussed independent businesses. 2. Provides opportunities to global investors, including sovereign wealth funds, retail investors and strategic investors, with direct investment opportunities in dedicated pure-play comp
Slide 5: Further information on the proposed new entities: Vedanta Aluminium and Oil & Gas
Further information on the proposed new Entities: Vedanta Aluminium The Company’s Jharsuguda facility is the largest single-location aluminium smelting facility outside of China, and recently saw its capacity ramp up to 1.8 MTPA. It is accompanied by Bharat Aluminium Company Ltd. (BALCO, a 51% owned
Slide 6: Vedanta Power and Steel and Ferrous Materials
recently acquired 1200 MW Athena plant and the 1000 MW Meenakshi plant which is in the process of being acquired. Total capacity will therefore near 5GW post completion. Vedanta Power is one of the largest private independent power players in India and backed by one of the world’s fastest growing po
Slide 7: Base Metals financial highlights and Vedanta Limited
Base Metals Business Financial Highlights FY 2023 FY 2022 Consolidated Revenue (INR Crore) 22,700 19,635 Consolidated EBITDA (INR Crore) 1,930 1,418 Consolidated Operating Profit (EBIT) (INR Crore) 1,243 697 Vedanta Limited Vedanta Limited will remain as an exciting incubator for new businesses incl
Slide 8: Advisors and investor call details
Anagram Partners acted as the legal advisor and Arpwood Capital acted as the Transaction and M&A advisor. BDO (Registered Valuer) was appointed as valuers. ICICI securities. were financial advisor solely for the purpose of providing a fairness opinion on the valuation done by the valuer for the prop
Slide 9: Contact and press release disclaimer
For more information, please visit www.vedantalimited.com Vedanta Limited Vedanta, 75, Nehru Road, Vile Parle (East), Mumbai - 400 099 www.vedantalimited.com Registered Office: Regd. Office: 1st Floor, ‘C’ wing, Unit 103, Corporate Avenue, Atul Projects, Chakala, Andheri (East), Mumbai – 400 093 CIN
Slide 10: Reorganisation Announcement
Reorganisation Announcement VEDANTA LIMITED September 2023 TRANSFORMING TOGETHER Inclusive. Responsible. Value-accretive delivery Sensitivity: Internal (C3)
Slide 11: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer 01 The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any fo
Slide 12: Creating Investment Opportunity in India
“Creating Investment Opportunity in India” Sensitivity: Internal (C3)
Slide 13: Vedanta's business is uniquely positioned to capitalise on India's growth potential
Vedanta’s business is uniquely positioned to capitalise on India’s growth potential 2022 2030 2030 CAGR 8.1% GDP(Real) $3.75 tn $7 tn 2022 $7tn economy CAGR 7.7% Per capita 5th income $9.4k $16.9k Largest economy (Nominal) ($3.75 tn) CAGR 1.4% Urbanization $7 trillion $1.1 trillion 36% 40% economy t
Slide 14: Unparalleled exposure to the global energy transition trend through critical minerals
Unparalleled exposure to the global energy transition trend through critical minerals India is amongst the fastest growing global economies and is poised to be the world’s third largest economy by 2027 Real GDP CAGR of World Largest Economies (2022 to 2028) 6.1% 4.1% 1.8% 1.7% 1.4% 1.4% 1.2% 0.9% 0.
Slide 15: Vedanta remains committed to its Net Zero pathway
Vedanta remains committed to its Net Zero pathway as a responsible global business 25% Absolute emission Net Zero carbon by 2050 2.5 GW of renewables by 2030 reduction by 2030 Vedanta’s “Restora” is India’s first low Aim to reduce 25% absolute GHG emissions by FY2030 Al carbon green aluminium projec
Slide 16: Vedanta has delivered consistent shareholder returns while investing for growth
Vedanta has delivered consistent shareholder returns while investing for growth Dividend $mn 159 199 159 1,058 1,223 1,002 205 504 2,246 4,700 ₹ crore 37,730 Dividend payout of >$11 Bn1 ~ ₹85,000 cr over last 10 years 16,727 7,099 7,880 7,005 964 1,216 1,038 1,450 3,531 FY2014 FY2015 FY2016 FY2017 F
Slide 17: A strategic shift is now required to enhance stakeholder value
A strategic shift is now required to enhance stakeholder value Build & acquire Optimise capital Operational Delivering on STRATEGIC high quality Strong financial excellence and allocation & growth OBJECTIVES natural resource performance maintain strong cost leadership opportunities business balance
Slide 18: How does Vedanta achieve this?
How does Vedanta achieve this? Currently Vedanta Limited operates business units across India and Africa - 01 • Oil & Gas • Metals & Minerals • Power • Technology Vedanta announces its intention to create six separate, focused verticals - • Allows investors greater choice and ability to invest in Ve
Slide 19: What will shareholders receive?
What will shareholders receive? Shareholders to receive shares in five new listed entities demerged from Vedanta Limited: Vedanta Aluminium 2 • Including 51% stake in BALCO Vedanta Oil & Gas 3 • Cairn India Limited 1 Vedanta Limited Vedanta Base Metals • Hindustan Zinc Limited 4 • Downstream Copper
Slide 20: End result - Streamlined pure-play Asset Owner driven model
End result - Streamlined pure-play “Asset Owner” driven model Business listed today or to be listed after Demerger STL / SPTL / Vedanta Inc1 Serentica / KCM2 63.71% 63.71% 63.71% 63.71% Vedanta Ltd 63.71% 63.71% Vedanta Aluminum Vedanta Power Vedanta Base Metals Vedanata Oil & Gas Vedanta Steel & Fe
Slide 21: Best in class leadership to drive stakeholder returns
Best in class leadership to drive stakeholder returns CEO and Management teams • Fully independent and empowered CEOs Arun Misra John Slaven Vibhav Agarwal • Autonomy for the business CEO CEO CEO management including capital Vedanta Vedanta Vedanta allocation, brand Limited Aluminium Power managemen
Slide 22: Timetable for implementation
Timetable for implementation FY23-24 FY24-25 September October November December January February March April May June July August September Board meeting to approve the Scheme of Arrangement Submission of Scheme with stock exchanges NOC of Lenders Receipt of NOCs from BSE & NSE post receipt of SEBI
Slide 23: Share entitlement ratio
Share entitlement ratio Shareholders to receive shares in five new listed entities No. of shares in Entity Face value of each share new entity Vedanta Aluminium Face Value INR 1/share 1 Shareholders will be equal Vedanta Power Face Value INR 10/share 1 partners in the value creation Face Value INR 1
Slide 24: Summary: Today vs Tomorrow
Summary Today Tomorrow 1 Valuation: Capital markets perceive a capital allocation Six pure-play businesses with world-class assets risk which results in a discount to intrinsic fair value 1 possessing global scale and best-in-class cost positions Entities created will have independent capital 2 Liqu
Slide 25: Introducing Six Vedanta Investment Vehicles
Introducing Six Vedanta Investment Vehicles Sensitivity: Internal (C3)
Slide 26: Vedanta Limited overview
Vedanta Limited overview 1 Vedanta Limited will continue to house HZL and be an incubator for new and small businesses Business Overview Key Operations Hindustan Zinc Limited ▪ Will continue to house Vedanta’s holding in Hindustan Zinc. INDIA 355 MW ▪ Will act as incubator for new and small business
Slide 27: Vedanta Limited - Investment thesis
Vedanta Limited - Investment thesis Unique portfolio of high potential new-age verticals 1 backed by continued exposure to healthy cashflows from HZL, 2nd largest integrated and 1st quartile cost global zinc business Vision: 2 Zinc fundamentals supported by limited greenfield growth and lack of seco
Slide 28: Zinc India - 2nd largest integrated zinc producer globally
Zinc India - Our strength and our pride | Paving the way for greater growth 2nd Largest integrated zinc producer globally and Q1 cost curve position 01 02 03 Capacity Mine Portfolio Cost Expansion with long life Optimisation Ramping up underground Ramping up Exploration Drive production mines and sm
Slide 29: Semiconductor and Display - Thriving to create value
Semiconductor and Display - Thriving to create value and explore untapped opportunities India Semiconductor demand expected to outgrow global Global Flat Panel Display market to grow to ~USD 130 demand by 8% with 60%+ from mobile segment by 2026 Bn by 2027, Indian market to ~USD 11 Bn in 2024 Worldw
Slide 30: Stainless Steel: grouping of FACOR and Nicomet
Stainless Steel Creation of a stainless-steel vertical through the grouping of FACOR and Nicomet ➢ Charge Chrome plant (CCP) ➢ Started Operations Expansion ➢ Debottlenecking 225 KTPA ➢ Mine Expansion ➢ Capacity Expansion FERRO ALLOY ➢ Reserves and Resources 12 KTPA Augmentation through NICKEL ➢ Capt
Slide 31: Vedanta Aluminum overview
2 Vedanta Aluminum overview On the path to become top 3 Aluminium producer globally (ex-China) Business Overview Key Operations ▪ Largest installed total aluminium capacity in India at 2.4 MTPA ALUMINIUM BUSINESS LANJIGARH | JHARSUGUDA | KORBA ▪ Integrated 5 GW Power & 2 MTPA Alumina refinery 2 MTPA
Slide 32: Vedanta Aluminium - Investment thesis
Vedanta Aluminium - Investment thesis 1 Strong earnings outlook underpinned by expansion to 3MTPA, lower costs and GREEN METAL upside Exposure to Poised to capitalise on strong aluminium demand India’s largest 2 growth (40% by 20301) supported by energy transition aluminium producer with 3 Vedanta i
Slide 33: Vedanta Aluminium: clear production and cost improvements
Vedanta Aluminium business: On track to deliver clear production and cost improvements 100% Targeting value accretive Growth to cater sunrise sectors INTEGRATION Aluminium Production (MTPA) Backward & Forward COST 2.60 LEADERSHIP Structural Intervention, 1st Quartile 2.29 1.96 1.97 CUSTOMER Co-creat
Slide 34: Vision to be 3 MTPA Aluminium producer
Vedanta Aluminium Business: Vision to be 3 MTPA Aluminium producer Aluminium Value Chain – Existing Post Expansion (< 2 years) Bauxite Alumina Smelting Bauxite Alumina Smelting ~6 MTPA Aluminium Aluminium (50% – domestic 2 MTPA 9 MTPA 51 MTPA Minimal impact procurement) (45% Captive) 2.3 MTPA (Capti
Slide 35: Vedanta Oil & Gas overview
Vedanta Oil & Gas overview 3 Largest private O&G producer in India; Uniquely positioned to capitalize on import substitution Business Overview Operations ▪ Largest private sector oil and gas producer in India ▪ Executed one of the largest polymer EOR projects in the world ▪ Total Acreage: Footprint
Slide 36: Vedanta Oil & Gas - Investment thesis
Vedanta Oil & Gas - Investment thesis 1 Cairn is India’s largest private oil and gas producer contributing 25% of domestic crude production India’s largest private 2 Best positioned for growth against backdrop of O&G producer with India’s demand for O&G increasing 50% to 7.2 MMBOED by 20301 target t
Slide 37: Rich portfolio mix spread across basins; focus on augmenting R&R
Vedanta Oil & Gas: Rich portfolio mix spread across basins; focus on augmenting R&R to increase production volume Vision Key Drivers for augmenting R&R Production (kboepd) Key Drivers for augmenting R&R > 50% of India’s domestic production 300 Infill wells: Exploration PSC/OALP: Maximize resource po
Slide 38: Vedanta Base Metals overview
Vedanta Base Metals overview 4 Diverse base and precious metal portfolio with one of the largest copper production capacity Business Overview Key Operations COPPER – ▪ Tuticorin Smelter Capacity: 400 KTPA; 160 MW CPP ▪ Silvassa Refinery Capacity: 216 KTPA 26 ▪ Tuticorin smelter and refinery are curr
Slide 39: Vedanta Base Metals - Investment thesis
Vedanta Base Metals - Investment thesis 1 Exposure to high-quality multinational, scalable assets producing copper and zinc vital for energy transition Investment into growing copper refining businesses Highly scalable 2 with overall capacity expansion plans over 400KTPA levered to fast growing copp
Slide 40: Zinc International - Poised to deliver significant value
Zinc International - Poised to deliver significant value Current Operations VZI to deliver 500 KTPA+ MIC run rate within 2 years Gamsberg Expansion (Phase – 2) VZI Production (kt) Gamsberg Operations: BMM Gamsberg o One of the world's largest Zinc deposits $466 mn 500+ o Phase 1 → 250 KTPA MIC capac
Slide 41: Vedanta Steel and Ferrous overview
Vedanta Steel and Ferrous overview 5 High-quality, multinational iron ore business and an integrated, scalable platform Business Overview Key Operations Electro Steel Ltd – o Capacity expansion to 3 MTPA o Largely long steel products AFRICA o Growth plan for 15 MTPA GREEN STEEL expansion INDIA Iron
Slide 42: Vedanta Steel and Ferrous - Investment thesis
Vedanta Steel and Ferrous - Investment thesis 1 Integrated and scalable Iron-ore business with healthy margins serving Indian and international markets 2 Significant investment upside with Iron ore business plans to scale production to 13 Mn High quality tons by 2025 backed by robust Indian demand m
Slide 43: Potential to create long term growth
Potential to create long term growth Iron Ore at a glance 4 MTPA ~13 MTPA STEEL & Pig Iron IRON ORE Strong transport and >4 BNT 5.4 MT ~13 MT logistics Total reserves FY23 iron ore FY25E iron ore infrastructure across ▪ Expansion at Bokaro / Goa and resources production production all operations ▪ P
Slide 44: Vedanta Power overview
Vedanta Power overview 5 One of largest independent power platforms with combined capacity of up to 4.8 GW Business Overview Key Operations ▪ Poised to be India’s 4th largest private sector IPP capacity POWER BUSINESS ▪ Talwandi Sabo: 1980 MW JHARSUGUDA IPP | TALWANDI SABO o One of the largest power
Slide 45: Vedanta Power - Investment thesis
Vedanta Power - Investment thesis 1 Exposure to 5 GW potential power business, one of India’s largest private power suppliers providing 30% of the power of the state of Punjab One of the largest 2 Poised to capitalise on government driven 50 GW private power thermal power expansion project by 2030 p
Slide 46: Thank you
Thank you Sensitivity: Internal (C3)
Slide 47: Annexure A
ANNEXURE A S. No. Particulars Details 1. Brief details of the The Aluminium Undertaking (as defined in the Scheme) comprises of the division(s) to be Demerged assets, liabilities and properties , related to or pertaining to the conduct of, or the activities of the Aluminium Business (as defined in t
Slide 48: Annexure A: Iron Ore Business and turnover of demerged divisions
of, or the activities of the Iron Ore Business (as defined in the Scheme) of the Demerged Company, on a going concern basis. “Iron Ore Business” means all the businesses, undertakings, activities, properties and liabilities of whatsoever nature and kind and wherever situated, pertaining and / or rel
Slide 49: Rationale and benefits of the demergers
lenders, strategic partners and other stakeholders. The manner of handling and management of each of the abovementioned businesses is also distinct. (iv) In order to lend enhanced focus to the operation of identified businesses, the Demerged Company proposes to segregate and organize these businesse
Slide 50: Share issuance to members of the Demerged Company
Demerged Company to Resulting Company 1 in terms of this Scheme, the Resulting Company 1 shall, issue and allot equity shares to all the members of the Demerged Company, holding fully paid-up equity shares on the Record Date in the following manner: “1 (One) fully paid-up equity share of the Resulti
Slide 51: Share exchange ratio and consideration
transfer and vesting of the Iron Ore Undertaking from the Demerged Company to Resulting Company 5 in terms of this Scheme, the Resulting Company 5 shall, issue and allot equity shares, to all the members of the Demerged Company, holding fully paid-up equity shares on the Record Date in the following
Slide 52: Consideration and listing of resulting companies
Demerged Company” • The consideration for the demerger of the Iron Ore Undertaking shall be discharged by issue of equity shares by the Resulting Company 5 as follows: “1 (One) fully paid-up equity share of the Resulting Company 5 having face value of INR 1 (Indian Rupee One) each for every 1 (one)