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Vedanta – Meet the Agarwals – Serentica Renewables

Author: Published on: Published in: Vedanta (NSE:VEDL)

July 16, 2025 – The Agarwal family has quietly built parallel operating structures outside of the VRL Group via related parties in order to engage in margin theft, and enjoy favorable, non-arms-length financing from VEDL and its GoI-backed subsidiaries.

VRL creditors and VEDL shareholders are financing their own subordination, funding projects that will generate no returns, and being outmaneuvered.

  • The Agarwal family has quietly built a parallel related party operating unit, Serentica Renewables India (Serentica), to poach high-margin contracts from, and enjoy non-arms-length financing from, VEDL, HZL and BALCO.
  • Serentica Renewables India’s immediate parent, Serentica Renewables (Singapore) Pty Ltd (Serentica Singapore), is owned by Twin Star Overseas (35% voting rights + preference shares), a wholly owned Agarwal entity, and KKR (65%), who put up funding for the venture.
  • Serentica’s business is to enter into a series of long-term power delivery agreements (PDAs) with VEDL, BALCO and HZL, despite having no power-generating operations of its own, no track record, and no the capital to fund projects.
    • These PDAs are signed on a cost-plus basis, effectively guaranteeing Serentica an operating profit regardless of its efficiency. Accordingly, these PDAs effectively become assets.
    • Serentica leverages these PDA assets to obtain loans from, among others, VEDL, HZL, and BALCO.
  • Serentica issues similar-risk hybrids to both VEDL and to Serentica Singapore, its equity holder, at comically different rates.
    • Serentica Singapore issued ₹2,200 crore ($257m) of high-yield CCD hybrid and NCD notes to Serentica in order to ensure priority payments upstream.
    • VEDL, HZL & BALCO also invested in ₹2,000 crore ($234m) of OCRPS hybrids in Serentica’s SPVs. These hybrids entitle the VEDL entities to a comical dividend of 0001% of face value per annum.
    • These OCRPS are eligible for conversion into regular shares in 30 years, a period longer than the PDA contract terms of the SPV’s PDA, which VEDL, HZL & BALCO will also pay Serentica for guaranteed-profit power delivery.
    • VEDL, HZL and BALCO investments in Serentica are effectively worthless.

Vedanta Resources Limited (VRL) faces a wall of refinancing risk and Vedanta Limited (VEDL) cripples itself by paying billions in unsustainable dividends. VRL’s creditors believe they’re safe because they assume the Agarwal’s instinct for survival aligns with theirs. It does not.

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