Vedanta Aluminium Metal Ltd has raised Rs 135 bn from a syndicate of banks, marking the first significant local currency loan for the business since the Vedanta Group split into separately listed firms. The financing was arranged with Axis Bank Ltd, HDFC Bank Ltd and ICICI Bank Ltd involved, and reflects efforts to establish independently financed entities following a court-approved demerger.

Axis Bank signed a loan agreement supplying Rs 55 bn, while HDFC Bank and ICICI Bank will together provide about Rs 80 bn. Lenders are expected to syndicate portions of the facility with Axis Bank launching the syndication. The loan tenors span six and a half years to seven years and the proceeds will refinance debt that Vedanta Aluminium inherited from the previously integrated company structure.

Banks offered interest rates in the range of seven point nine per cent to eight per cent, and the arrangement is intended to provide longer dated funding for the aluminium business. Company and bank representatives did not immediately respond to requests for comment. The fundraising underlines Vedanta Aluminium's move to secure greater financial flexibility and reduce reliance on group level capital, a reorganisation approved by an Indian court in December.

Rating agency Crisil upgraded Vedanta Aluminium to AA+ with a stable outlook, citing improved financial flexibility after the demerger. Demand for refinancing has coincided with broader credit growth in India, with bank lending expanding 17.7 per cent to Rs 217.3 tn as of mid July according to Reserve Bank of India data. ICICI Securities estimated that net debt could fall below Rs 100 bn by financial year 2028 owing to robust cash flows.