Vedanta Oil & Gas Plans $5 Billion Expansion Through Internal Accruals, Debt

Vedanta Oil & Gas will fund a planned $5 billion capital expenditure programme through a mix of internal resources and debt, leveraging its debt-free balance sheet and annual EBITDA of about $1 billion, Vedanta Group Chairman Anil Agarwal said on June 15.

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The investment plan is aimed at expanding exploration and production activities across offshore and onshore assets over the next three years. Agarwal made the remarks on the sidelines of the listing of Vedanta Group’s newly demerged businesses on Indian stock exchanges.

The development comes as four independently listed entities - Vedanta Oil & Gas, Vedanta Aluminium Metal, Vedanta Power and Vedanta Iron & Steel - commenced trading on June 15 following the group’s restructuring exercise.

Expansion Backed By Debt-Free Position

Speaking about the proposed investment, Agarwal said the oil and gas business is entering its next phase with no debt on its books and substantial asset value.

He stated that the company generates nearly $1 billion in annual EBITDA and believes the planned investment can be comfortably supported through retained earnings and additional borrowing if required. He added that equipment suppliers and technology providers remain willing to support the company’s drilling programme.

According to the management, the expansion is intended to strengthen production levels as existing oil fields face natural output declines.

Production And Financial Performance

Vedanta Oil & Gas reported weaker operational performance in FY26. As per the company’s investor presentation dated April 29, average daily gross operated production declined 16% year-on-year.

Revenue for FY26 stood at ₹9,582 crore, down 13% from the previous year. EBITDA fell 7% year-on-year to ₹4,664 crore.

The company is looking to reverse the production decline through increased drilling and exploration activity under the proposed investment plan.

Market Debut And Share Performance

Vedanta Oil & Gas shares listed at ₹39 on the BSE and ₹38 on the NSE on June 15. The stock later declined 5% and hit its lower circuit limit at ₹36.10 on the NSE during the trading session.

Agarwal also said he expects each of the newly demerged businesses to have the potential to achieve a market capitalisation of $100 billion over time.

Dividend Policy To Continue

The group indicated that shareholder payouts will remain a priority after the demerger. Agarwal said Vedanta has historically maintained a dividend-paying track record and intends to continue that approach through its separate listed entities. He noted that each company will independently decide its payout level based on business requirements and financial performance.

The demerger is expected to allow each business to pursue sector-specific growth strategies while operating with separate capital allocation and funding structures.