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Vedanta Resources' rating was upgraded to 'B' from 'CCC+' by S&P Global Ratings due to enhanced capital structure and liquidity. The company has sufficient internal funds to meet USD 1.4 billion debt maturities by 2025, supported by improved subsidiary performance.
S&P Global Ratings has upgraded Vedanta Resources Ltd's rating to 'B' from 'CCC+' due to an improved capital structure and better liquidity. This upgrade reflects the company's strengthened ability to meet its debt obligations.
Vedanta Resources Ltd, the parent company of Mumbai-listed Vedanta Ltd, has demonstrated sufficient internal resources to cover USD 1.4 billion in debt maturities by December 2025. This confidence is strengthened by recent fundraising and increased dividend capacity at its subsidiaries.
S&P has also raised the long-term issuer credit rating of Vedanta Resources and the issue ratings on its senior unsecured bonds to 'B-' from 'CCC+'. The rating agency has assigned a stable outlook, anticipating proactive measures by the company to address the maturity of USD 1.2 billion of debt due in April 2026, with a clear strategy expected by early 2025.
At the end of June, Vedanta Resources raised approximately USD 500 million by selling a 2.6% stake in its subsidiary Vedanta Ltd. This, along with expected dividends and brand fees from Vedanta Ltd, should enable the company to meet its financial obligations without needing external debt.
The company's liquidity access has been enhanced by the transfer of about USD 1.25 billion of general reserves to retained earnings at Hindustan Zinc Ltd, a 65% subsidiary of Vedanta Ltd. Improved operating performance at Vedanta Ltd has also increased its dividend-paying capacity.
Vendant shares closed at ₹433 on Thursday, slightly up by 0.069%. Although the one-month return of the stock has been -2.06%, it has given a return of 68.38% YTD. After the rating upgrade news, Vedanta stock will remain in focus.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
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