Key facts
- Vedanta Chairman Anil Agarwal plans to significantly expand oil and gas production to 500,000 barrels per day.
- The company aims to double its aluminum output and become the lowest-cost producer.
- Steel production is targeted to increase to 15 million tonnes annually.
- Vedanta plans to raise $20 billion over the next three to three-and-a-half years.
- The company is undergoing a five-way demerger to unlock value and raise capital.
Anil Agarwal, chairman of Vedanta, is pursuing a significant restructuring of his business empire, including a five-way demerger of its various entities. Agarwal stated that oil and gas is poised to become one of Vedanta's largest businesses, with plans to ramp up production to 500,000 barrels per day. This strategic move is part of a broader vision to unlock value, attract investment, and fuel India's growth in mining and manufacturing.
During the interview, Agarwal detailed ambitious targets for Vedanta's other core businesses. The company aims to double its aluminum output, becoming the largest producer with the lowest cost structure. Steel production is slated to increase from 4 million tonnes to 15 million tonnes annually, encompassing special steel. Power generation capacity is targeted at 20,000 MW, and Vedanta will also focus on producing nickel and manganese, in addition to its existing position as India's largest zinc producer.
Agarwal acknowledged the need for technological development in oil and gas, drawing parallels with international players like BP and Shell. He also touched upon Vedanta's past delisting from London, which facilitated raising $35 billion, and indicated openness to future listings in other global financial centers, including the US, to raise additional capital. The group requires approximately $20 billion over the next three to three-and-a-half years, with a preference to utilize internal resources first, leveraging its substantial EBITDA.
Addressing concerns about corporate governance, Agarwal referenced Vedanta's history as a FTSE 100 company, emphasizing stringent standards, particularly for its aluminum and oil and gas divisions. He also discussed the broader economic implications of Vedanta's expansion, highlighting significant tax inflows to the government exchequer and substantial job creation, estimating direct employment to rise and the number of beneficiaries to reach 3 million.
Agarwal expressed his belief in India's potential for entrepreneurship, particularly in mining and basic materials, advocating for self-certification and strong penalties for non-compliance to foster manufacturing growth. He also explained his philosophy of supporting downstream industries by focusing on upstream operations, allowing new entrepreneurs to develop those sectors.