Vedanta’s BPCL acquisition cost under the lens

NEW DELHI: Metals-to-oil conglomerate Vedanta’s interest in buying Bharat Petroleum Corp Ltd (BPCL) is a natural progression towards downstream integration that will hedge its margins but there are doubts over its promoters’ ability to raise finances for such acquisition, analysts said.

While BPCL dividends could easily cover the cost of debt of any acquisition, “the question we have is how would Vedanta Ltd secure funding, given the worries on leverage at Vedanta and the parent?,” JP Morgan said in a report.