ED raids Vedanta Group offices in FEMA case
What's the story
The Enforcement Directorate (ED) has launched a raid at the offices of Vedanta in Mumbai and Delhi. According to CNBC-TV18, the searches are related to royalty payments made by Vedanta to its parent company. The action comes under the Foreign Exchange Management Act (FEMA). Further details on the investigation are awaited as Vedanta has not issued any official statement regarding these developments.
Business strategy
ED action amid Vedanta's demerger plans
Last month, Vedanta Group Chairman Anil Agarwal had announced plans to independently list all four demerged entities of the group within a month. The first entity, Vedanta Aluminium, currently produces three million tons annually with a target of six million tons in three years. Agarwal said they are on track to become the world's largest private-sector aluminum producer and plan to build around 1,000 downstream industries through an industrial park model.
Investment strategy
Oil and gas business
The second entity of the demerger is the oil and gas business. Agarwal said Vedanta plans to invest $5 billion over three to five years to increase production to 500,000 barrels per day. This business includes tight oil, shale gas, shallow-water and deep-water assets as well as a block in northeast India. The group is also seeking a long-term lease from the government for large-scale investments.
Expansion plans
Power and steel business
The third entity of the demerger will be the group's power business, which currently generates 4,000 MW and aims to expand capacity to 20,000 MW through brownfield projects. The fourth entity will be the iron and steel business. Agarwal said they currently produce four million tons of steel with a target to increase capacity to 15 million tons by focusing on green, electrical and special steel.