Anil Agarwal's Vedanta Ltd is evaluating the listing of its unit Cairn Oil and Gas as well as the sale of stake in some oil-producing blocks to fuel its growth ambitions, two people with direct knowledge of the matter told CNBC-TV18.

The metals and mining company, which won most of the oil blocks the Indian government auctioned in the past one year, has approached investment banks for a possible listing of Cairn to raise funds, they said. Both the persons did not want to be named.

When contacted, a Vedanta spokesperson told CNBC-TV18 that the company is funding its capital expenditure internally. "We have been over years funding our growth capex from internal accruals and general cash surplus post growth capex and expect to do so similarly into the future.”

Vedanta won 51 of the 87 oil and gas blocks auctioned by the government under its open acreage licensing policy. The company aims to invest $650 million in the new blocks and will pump in a total of $2.9 billion in the oil and gas sector over the next three years.

Vedanta is also exploring the option of monetising its oil-producing assets by selling minority stakes in them. Its block in Rajasthan (RJ-ON-90/1) is its largest oil-producing asset.

Vedanta aims to increase oil production from 400 to 1,000 kboepd (thousands of barrels of oil equivalent per day) in 2-3 years.

Vedanta has asked bankers to assess the valuation of the oil and gas business and also suggest if there will be an investment appetite for the newly acquired blocks due for exploration.

Most analysts value Cairn, the oil and gas exploration unit that Vedanta merged with itself in April 2017, at Rs 15,000 crore. Vedanta has a debt of Rs 28,700 crore as of the first quarter of FY20.

Shares of Vedanta ended at Rs 139.90, down Rs 2.45, or 1.72 percent on the Bombay Stock Exchange.

First Published:Aug 21, 2019 3:26 PM IST