Mining major Vedanta Ltd, a London-based Vedanta Resources (VRL) unit, has approved a private placement of non-convertible debentures (NCDs) to raise up to Rs 2,100 crore.

NCDs will be raised in one or more tranches, the company said in a stock exchange update. The move comes as its parent company, VRL, seeks to raise funds to pare down debt.

In early March, Vedanta approved its fifth interim dividend for fiscal 2023 of Rs 20.50 per share, totalling Rs 7,621 crore. Hence, the total dividend payout for FY23 is approximately Rs 37,733 crore.

On March 29, Crisil Ratings revised Vedanta’s outlook on NCDs and long-term bank loans to “negative” from “stable”, citing high financial leverage and low financial flexibility. Crisil revised its ratings on Rs 6,444 crore and Rs 3,000 crore NCDs to ‘negative’, reaffirming the ‘AA’ rating. It affirmed the ‘A1+’ rating on the Rs 10,000 crore commercial paper and short-term loan facility.

VRL has approximately $3 billion in annual debt maturities in FY24 and FY25, with short-term maturities of up to $1.7 billion in the first quarter of FY24. The company is discussing with lenders to refinance debt maturing in the fiscal first quarter through 2024. It said the same is expected to be completed by the end of March 2023 or the beginning of April 2023.