Why Vedanta is planning an investment of over ₹13,220cr
What's the story
Vedanta Ltd, India's top aluminum producer, has announced a major expansion plan. The company plans to invest ₹13,226 crore in ramping up its aluminum production capacity from the current 2.4 million tons per annum (MTPA) to 3.1 MTPA by FY28. This move is part of Vedanta's growth strategy and will help it meet the rising demand for aluminum in India.
Strategic focus
Aluminum's growing significance and Vedanta's market dominance
Aluminum, the second most consumed metal after steel, is increasingly important for electric mobility, renewable energy, urban infrastructure, and aerospace. Vedanta dominates the Indian aluminum market with over 50% share. The company plans to make aluminum its biggest contributor to its $8-10 billion EBITDA target by FY28. This strategic focus on aluminum underlines its importance in Vedanta's overall growth strategy.
Growth trajectory
Capacity expansion and cost reduction initiatives
Vedanta's aluminum capacity is set to increase from 2.4 MTPA to 2.75 MTPA by FY26, and further to 3.1 MTPA by FY28. The company's subsidiary, BALCO, where Vedanta holds a majority stake, is also on track to cross the one million ton production capacity mark. Over the last 11 quarters, Vedanta has cut its aluminum production cost by nearly 24% ($641 per ton) through backward integration with Lanjigarh Refinery expansion and coal mines.
Market resilience
Fully captive operations and rising aluminum demand in India
Vedanta's aluminum business runs on fully captive operations, a model not common globally. This gives the company an edge in a volatile geopolitical environment while enabling low-cost manufacturing. As India's GDP is expected to grow significantly in the coming years, aluminum demand is likely to rise substantially. Government initiatives such as 'Make in India,' '100% rural electrification,' 'Housing for All,' and 'Smart Cities' will further increase metal consumption in the country.