The first question is from the line of Vikash Singh from PhillipCapital. Please go ahead.

So I'll take that question. In terms of aluminum, it's a difficult question to answer. I think we've all seen significant volatility in that price over the last weeks. What I will say about our structurally low cost position in the first quarter of the cost curve, we are very resilient through different LME prices. And we're confident that we can continue to generate strong cash through the cycle. So that's the way we're thinking about the metal price. It's not something we want to or can predict.

No, but since you are taking a figure of $1,000 per ton, so definitely, there should be some assumption in terms of the cost of production basis right?

So roughly, if you take the number of $2,400 as LME and $200 as premium and $1,600 as cost that we aim to go to, we will come to a number of $1,000 per ton.

Understood. Second question, regarding oil and gas business. Since what I'm hearing that in the market that the rig cost has been rising exponentially, and we are deploying more rigs basically. So I just wanted to understand our o pex cost guidance, and how does it impact our overall profitability?

So you're talking about cost of?

The opex in the oil and gas business because the costs are rising pretty fast.

Okay. Hitesh, are you there? Hitesh?

Yes. I'm here. See, in oil and gas, our opex is going to be two things; one is polymers, two is our well interventions, where the wells which are declining where we intervene to arrest decline. So these are the two key factors which are driving cost. And we have also started injecting polymer in our other fields in addition to Mangala, Bhagyam & Aishwariya, which started last year. So these are the key contributors. But I think more importantly, what will work for us is adding new fields, which are beyond the three key fields. And since those fields will be initially under natural floor water front, so the cost will get optimized. So one is that part. Second, what we are also doing is given the polymer injection is going for long, now we have started doing the reverse where we are going down on polymer parts. So you would see that going forward, that cost also will start declining, especially with related to polymer. And of course, what we intend to do is start injecting ASP, which we are planning to do in two or three months' time, our first pad injection of ASP, which we've been talking in the past. So that will give us not only a reduction in polymer w ith a constantly increasing in ASP, but more importantly our volume growth.

So overall, are we not expecting any opex increase in that business going forward?

Our opex on a polymer flood model or...

Overall opex I am talking about...

Okay. And a visible difference in the volumes we can expect from this quarter because we have been talking about volume increase from now quite some time, it's been years?

So maybe a couple of points from my side, and Steve can add given that he's coming and trying to look at things differently, but I think from oil and gas point of view, one is we have started bringing our new fields also into production, Jaya is one exampl e. But last two, three years, we've been focusing on OALP where we have 100% participation interest. So your -- any volume there is quite significant in terms of our bottom line contribution. So first one is there, we have done three, four or more discoveries in O ALP, and we are working to monetize those also. So one part is trying to bring this new field, which gives us a visible addition. Second, of course, the ASP as well as increments help us to manage decline and ensure that our core fields MBA give us a stable volume. So, Steve, do you want to add anything on this?

Not really, Hitesh. I think you covered all the points. I mean I would agree that we shouldn't just focus on production because it's from where the production is coming where we're really focusing on growing our gas production, and we're making a bigger margin on gas. And as Hitesh said, the production from fields like Jaya, it may not set the world on fire, 2,000 barrels a day, the money associated with that, because it's a very simple operation, is much higher per barrel than the declines we're seeing in Mangla. And we've got many, many. We've hired in some people. We are bringing extremely good people, good technologies from around the world. We're just figuring out exactly how to implement them in our fields. And as Hitesh says, we're really targeting, bringing on not just optimizing the existing fields, but bringing in new fields into production. As I mentioned in my small short talk, we're actively studying the fields that have been found 8 -10 years ago, and we see very good opportunities to bring them in economically in the next six to 12 months.

Next question is from the line of Ashish Kejriwal from Nuvama Wealth.

Sir, a couple of questions. One, amid this restructuring of current debt, how serious we are in terms of our monetization of steel and iron ore assets? And is it possible to guide where we are in that direction? That's my first question.

Sure, Ashish. First of all, thanks for the recent report on Vedanta and your recommendation and also in terms of target price. I'll start first by saying if you look at last couple of years at the Holdco, Vedanta Resources, debt has gone down from $9.5 billion down to sub $6 billion, so $3.5 billion deleveraging at Vedanta Resources. Of course, overall debt for the group remained same. But right now, in terms of assets and liabilities being at the same place, in that case our balance sheet and the structure for the capital is far more harmonious. Secondly, coming to the point specifically, yes, with the debt restructuring at Vedanta resources is successful and the 3.1bn bonds maturities have been pushed forward by 3 years. With this our debt at Hold Co is more balanced, evenly spread and easy to manage.

And so our publicly announced intent of noncore assets disposition remains intact. Right now, we have witnessed interest both from domestic and international players. The process in terms of due diligence, data rooms, Q&As, site visits is ongoing. We are hopeful to get some offers by this quarter end, and sometime, early next quarter, we see the deal going through. So net -net, our interest in disposition of noncore assets remains intact, de -leveraging both for V EDL and we, as a group, remains absolutely our single biggest priority.

And sir, second thing is besides this monetization, we have seen promoters increasing stake from 50.1% to 69% and then coming back to 63.7%. So is there further stake reduction from the promoter is in radar? Or that the possibility which one can look at?

I mean, Vedanta is a large corporation in terms of initiating corporate actions, so we are never shy. So you're right, 50% going to almost 70% and 5% dilution in the recent past is strategical initiatives. And also we will appreciate, Ashish, it's hard to comment any plans in the near future, but given an option, looking at our cash position and the priority of deleveraging, those things also can be discussed. But is that in the offering the near future, maybe I would say no.

Sure. Sir, next thing is on operations. We are having power sector or power subsidiary separately where we have Athena and Meenakshi. So is it possible to share the capex plan for that, when that's going to be commissioned? And similarly for coal block also because now we have been seeing continuous delays in coal block, coal block start-up for the other mines. So where we are in that status of that coal block, especially Kur aloi and Radhikapur, means whether we have received forest clearance, the environmental clearance or land acquisition, where we are so that we can be comfortable that now we can start the mine from second quarter FY25?

Sure. So on the first part, I'll request Vibhav Agarwal, our Power CEO to comment on plans for capex for Athena and Meenakshi.

Yes. So, Ashish, when we are actually building up these capacities to start generating, obviously, we require a bit of capex because these plants are half built. So we estimate close to INR6,000 crores would go into these plants to make them completely operational. And we -- I have already discussed about making them operational by FY26 completely. So this entire capacity would be up and running by then.

Sure.

So, on the coal block, if you look at Kur aloi, it is in the Stage 1 clearance level, and once the Stage 1 clearance is done, it will go to then forest clearance of Stage 2. Total 966 hectares of land is involved, out of which forest land is 214 hectares, so absolutely on track. And we can surely -- mining plan is approved, so it's just in next stage of projects. Radhikapur, it's -- Stage 1 is already clear. And Stage 2 is continuing. So there is absolutely no apprehension as far as productions are concerned. If we look at Radhikapur coal block, then FY25 by second quarter it will come to a capacity of 6 million tons per annum. And Kuraloi by that time will be 8 million tons per annum in FY25 and in FY26. And Ghogharpalli by FY26 will be 20 million ton s per annum. So if you look at the -- Radhikapur 6, Kuraloi 8 and Ghogharpalli 20, and if you see the timeline, it is -- final operations, they will come by second quarter of FY25.

So we are confident about second quarter FY25 because...

Because if you see once Stage 1 is clear. Other one, Stage 1 is absolute on the verge of clearance, then the Stage 2, and the business starts.

Sure, sure. And sir, lastly, about international zinc, we have seen Gamsberg, they are never produced at optimum level despite operation for last 20 years. So what is the matter over there? And when we are expanding our capacity from 250 to 500 KT MIC? When that is going to happen?

So, Gamsberg always had the issue of the concentrator. Last -- that time, we used to have 60% recovery in the concentrator, which has gone up to now 80% level. So huge improvement has happened on the concentrator side to produce a better grade of concentrate as well as more quantity of concentrate. However, the mine is passing through a phase when suddenly between two different locations of ore body the overburdened quantity is very high. And some of the movement of overburden has not been commensurate with their production level. So there is a low for the current quarter, and by another one quarter, Gamsberg operations will come back to line in full steam.

And sir, expansion by when?

No, expansion will continue, but I'm saying the current level of quarterly performance that has fallen down because of the huge requirement of overburden removal, and another quarter or two, it will come back to our operational level what is to report earlier.

Yes, that we understood, sir. I was asking about expanding capacity, when it is going to be commissioned.

Expansions are on the offing, and it's by 2025 December or so, expansions will be complete.

Sure. Thank you and all the best, sir.

Thank you.

Thank you. Next question is from the line of Amit Dixit from ICICI Securities. Please go ahead.

Yes. Hi. Good evening, everyone. And thanks for taking my question. My first question is on the Aluminium division where that waterfall chart, where we find that the other expenses part, if you look at it, which has gone down materially , conversion as the cost essentially from $142 per ton to $56 per ton. So just wanted to understand the key drivers behind it and whether it is sustainable?

No. This waterfall chart, it is conversion and others, which is like $56 per ton in this quarter. Last quarter, it was $142. So I wanted to understand why it has gone down so substantially and whether this is sustainable.

So there may be some one -time cost involved last time, so because of that only there is a reduction.

So maybe, Amit, the way to look at the overall aluminum CoP is total number. And you may have seen a Y-o-Y between the last year Q2 and the current year, 18% reduction in CoP coming across three large buckets, be it aluminum, power or the conversion costs. And across the verticals, be it aluminum or zinc or in terms of oil and gas, our CoP has been our single biggest highlight of the last quarter. So journey will continue. In terms of overall target, we closed aluminum at almost $1,840, the finished goods CoP as on Q3. And the numbers in December is even lower than the Q3 average. The journey continues. And toward March end, our target is about $1,700 per ton as CoP of aluminum.

Okay. The second question is, again, on Gamsberg. I mean stretching Ashish's question a little further. So when I look at Gamsberg last year, your MIC was roughly 208 kt. And this year, it is much lower. Our recoveries are at a record high. So just couldn't reconcile the apparent issues over there. If the mining is an issue, then it will always remain an issue. If there is a problem around subsidence, around slope not being proper, I think that will always be an issue, whether your recovery is high or low. So first thing, we wanted to understand when we will reach that 250 kt number for the year, because that has been alluding us for quite some time.

So in the Gamsberg, if your apprehension is about mine subsidence or slope failure, those are not the issues. Current issues are related to the strip ratio and overburden removal because of the bad performance of some of the reps who were engaged earlier, they have not been able to perform to the target that they were given. So overburden removal has been slow and which is having an impact of availability of right grade of ore at this point of time. Hence you see in spite of the higher recovery in the mills, we are not able to generate equal amount of MIC. However, current focus of the management is on engagement of best of the best contractors to get the overburden removed as quickly as possible. That's why I predicted that in another coming couple of quarters, looking at that numbers from Gamsberg also.

But, sir, for nine months, we have a number of 126 KTPA. I mean, assuming if you hit 50, you will reach 175 or something. So for FY'25, can we go ahead and achieve 250 KTPA. That is the moot question I have.

Whole preparation is toward that only, that in FY'25 we achieve that 250 KTPA number.

Thank you.

Thank you. Next question is from the line of Ritesh Shah from Investec. Please go ahead.

Hi, sir. Thanks for the opportunity. Couple of questions. Sir, first is possible to quantify how much is the retained earnings numbers for Vedanta and Hindustan Zinc December end?

Yes, sure. So for Vedanta, as in December, the RE is about INR1,500 crores. And for zinc, it is almost INR2,000 crores. So we as a group, about INR3,500 crores is the RE as of December.

That helps. Second question is congratulations on the liability management exercise. I just wanted to get a gist on how much is the cost of funding, one is for the $1.25 billion facility. And the second is if you look at on a total basis of, say, $6.4 bill ion outstanding at VRL, how much will be the cost that one should look at?

On the point of the entire debt restructuring, as I mentioned, I still wish to again repeat that the $3.1-odd billion of bonds maturing over the next one year has been flattened, and it has been pushed by almost three years. In case, the VRL debt maturity in the current fiscal as in the FY'25 is about $1.8 billion, including interest cost of $800 million. That means we are in a far better position in terms of our managing debt as Vedanta Resources. In terms of the funding per se, the cost of funding is about 13% overall.

This includes guaranteed, non-guaranteed loans as well, as well as ICL from Cairn, everything on a blended basis, is around 13%? Or would that be a fair thing for $6.4 billion?

That's correct. Yes. Blended rate about 13% all inclusive.

Okay. And how much would that be for the $1.25 billion wherein we have done brand -fee securitization?

The same ballpark out there, Ritesh.

Okay. And does Oaktree have any exposure either at the HoldCo level or at the OpCo level? And are there any direct or indirect pledge encumbrances related to Oaktree?

Yes. So as part of the whole debt restructuring, the Oaktree has exposure at the Vedanta Resources, $250 million, which gets repaid once we get the money on the 6th of Feb. And we also have -- you may have seen two NCDs we have done in the last year from the Oaktree, that continues.

Sir, how much will be the total outstanding? If I remember it right, it was $750 million. Is the number the same? Or has it reduced?

It is at $700 million at Vedanta Limited.

At Vedanta Limited. Okay. And sir, I think in one of the prior questions, you did indicate that we would be looking at divestments. In fact, you said that it could be probably next quarter or after that. Given the way which we have done the debt maturity p rofile, honestly, there is no need for any divestments. Is it because the capex ask is high, and hence, we are looking at divestments? How should we look at it from a cash flow standpoint? And if you can give some numbers around capex at Vedanta console level, I think that would be great.

Yes, sure. So you're right. I just proposed the debt raising at Vedanta Resources, our overall debt position as a group is far more comfortable. And at the cost of repetition, Ritesh, now, given there is no looming large maturity at Vedanta Resources, our ability of taking slightly longer - term calls at VRL on refinancing has enhanced significantly. Having said that, the ESL or steel disposition has been independent, and that continues. As I mentioned initially, right now the process in terms of due diligence, data room, Q&As, site visits is ongoing. And we're hopeful to get firm pricing by this quart er end if that continues. In terms of deal culmination, sometimes in Q1. So that remains on track. It is fast for the course.

In next FY, would that be right?

Q1 of next fiscal year. That's correct.

Next fiscal, perfect. And just bookkeeping questions. Any update on GR to RE at Vedanta. I think you were securing creditor's approvals. And I think Hindustan Zinc has some, I think, court case on 15th of Feb. If you could provide some update over here, that would be useful.

That is the position at Vedanta Limited. Still the engagement with lenders are ongoing. It is progressing, but I can't right now give a definitive date when do we close it. On the zinc side, we got now all the approvals, including the shareholders. Now, before the NCLT for the second motion, the matter is being heard on the 15th of Feb. And depending upon how the things progress, we foresee that getting closed by this quarter end.

Sure. And on the capex side, I just asked that question, how should we look at it given the cash flow profile is quite comfortable? We have given strict targets on volumes, but how should we look at the capex number?

Current year capex guidance was about $1.7 billion as per our last guidance. And we see it being maybe a tad lower, about $1.5 billion to $1.6 billion on a higher side. Historically, last multiple years, we have not exceeded our guidance on the capex. In fact, we have been a bit lower on that side without impacting overall timeline for the project. In terms of guidance for the next fiscal, I think we have to await for one more quarter. As part of full year numbers, be it volume, CoP and the guidance for the capex, will be provided when we speak next time in three months.

In terms of advances, I think they are routine, Ritesh. And they are a part of working capital. Yes, we do have those advances, which keeps getting unfunded in terms of repayments, and we keep taking it. That is working capital that each businesses track separately.

Sir, would it be possible for you to quantify that number, advance pay and supply agreement or anywhere on the balance sheet that we can actually figure it out?

It's almost INR2,000 crores as of December.

Okay. This is very helpful. Thank you so much. I really appreciate it.

Thank you. The next question is from the line of Bharat from Standard Chartered Bank. Please go ahead.

Hi. Thanks for the call. First question for me is Vedanta Limited's domestic rating has been downgraded…

Bharat, sorry to interrupt you, can you please speak through the handset.

Hi. Is this better?

A little bit.

My first question is Vedanta Limited's domestic rating has been downgraded a couple of times by India Ratings in the last few months. How do you think this will impact the funding costs for Vedanta Limited going forward?

Yes. The India Rating, in fact, it came for sure as a disappointment, and we have disagreed with them as well. But again, sometimes more than one, respectable point of view is quite possible. Also, Bharat, I would like all of us to also take a look at rati ng by CRISIL, which is a Tier 1 agency in the same week last week, where CRISIL has reaffirmed V EDL rating at AA - with developing action. And we are engaging with India Rating. Their key rationale for downgrade has been recent high -cost borrowing in December. And we did point out, it was an aberration given ongoing debt restructuring at Vedanta Resources. As we speak, we are dealing with one large Indian bank for a very large val ue loan at single-digit cost. So we will be engaging with India Rating, and we are very hopeful that very soon even they will give us an upgrade to AA. So far as it's an impact on the money market, we don't foresee this action will have an impact on our ability of tapping funds in terms of value or cost of funding. As I mentioned, CRISIL has reaffirmed AA- for us.

Okay. Sure. And then the second question is, you mentioned Oaktree's exposure at Vedanta Limited is now at about $700 million. Can you let us know what is the interest cost on those facilities? And what kind of security has been pledged?

And the securities?

It's against fixed assets. It's 1.2x coverage.

Okay, that's it from me.

Thank you. Ladies and gentlemen, we will take that as the last question. I will now hand the conference over to Ms. Prerna for closing comments.

Thank you, Neerav. And thank you all for taking the time to join us. I hope we were able to respond to most of your questions. In case you have any further questions, please feel free to reach me or my colleagues at IR team. This concludes today's call. We look forward to reconnecting you for next quarter's earnings call. Thank you, everyone.

Thank you very much. On behalf of Vedanta Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.