Vedanta to set up 10 billion dollars fund to scout for govt assets

Vedanta Resources Ltd’s plan to set up a $10 bn fund to acquire state-owned firms has attracted interest from sovereign wealth funds and the corpus will be floated once the government invites price for firms such as BPCL or Shipping Corporation of India (SCI), its chairman said.

Metals and mining magnate Anil Agarwal’s group has expressed interest to acquire government stake in Bharat Petroleum Corporation and SCI, worth over $12 billion.

“We are creating a $10 billion fund,” Agarwal said. The fund will be made of Vedanta’s own resources and outside investment. “We have a tremendous response for this, especially from the sovereign wealth funds,” he said.

The idea is to create a fund with a 10-year life span that will use a private equity-type strategy, buying into companies and boosting their profitability before seeking an exit.

Agarwal had previously stated Vedanta would team up with London-based firm Centricus to create a $10-billion fund that will invest in stake sale of public sector undertakings. Centricus oversees $28 billion in assets. “They all want me to be the chairman,” he said.

While Vedanta has completed due diligence of BPCL, the government earlier this month postponed invitation of the price bid for sale of its stake in SCI. The government has not indicated any date for invitation of price bids for BPCL or SCI. “As soon as the government starts coming out with a disinvestment programme, in no time we can raise. Nobody wants to put in money and pay fees and other costs,” he said.