Vedanta must take care not to sound like India's next Adani

Its global bonds have flagged and New Delhi links are under watch

- ANDY MUKHERJEE

Highly leveraged Indian tycoons are having a rough time. Gautam Adani's $236 billion infrastructure empire has shrunk by more than threefifths in a month. But while his relentless rise and spectacular fall hog headlines, a smaller storm may be brewing for another magnate. Anil Agarwal's once-Londonlisted Vedanta Resources has a pile of debt, including a $1 billion bond due January. Yet, his most recent attempt to trim the load has upset the one partner he can't afford to annoy: New Delhi.

Around this time last year, when the US Fed was still to begin raising interest rates to tame inflation and Russia's war in Ukraine had started to send commodities surging, Agarwal was toying with the idea of merging debt-laden Vedanta Resources with its cash-rich India-listed unit Vedanta Ltd. That plan didn't go anywhere. However, Vedanta Resources did manage to shed its net-debt burden from almost $10 billion in March last year to a little under $8 billion.

With the listed unit declaring a dividend last month, its parent and majority shareholder is "highly likely" to meet its obligations until September 2023, according to S&P Global. So far, so good. But it was when Agarwal tried to secure the finances for $1.5 billion in loan and bond repayments between September this year and January 2024 that he hit a roadblock.