Vedanta Resources Upgraded to 'B' Rating by S&P Global

S&P Global Ratings has upgraded Vedanta Resources Ltd's rating to 'B' from 'CCC+' based on improved capital structure and liquidity. The company has sufficient internal resources to meet debt maturities until December 2025, following recent fundraising and increased dividend capacity at its subsidiaries.

S&P Global Ratings announced on Thursday that it has upgraded the rating of mining conglomerate Vedanta Resources Ltd to 'B' from 'CCC+' due to an improved capital structure and enhanced liquidity.

S&P indicated that Vedanta Resources has sufficient internal resources to manage debt maturities until December 2025, following recent fundraising efforts and an increase in dividend capacity at its subsidiaries. The company has adequate funds to meet USD 1.4 billion of debt maturities by the end of 2025.

"We raised our long-term issuer credit rating on Vedanta Resources as well as the issue ratings on its senior unsecured bonds to 'B-' from 'CCC+'," S&P said, adding that a stable outlook reflects expectations that the company will handle the maturity of USD 1.2 billion of debt in April 2026, with clear plans by early 2025.

The company's access to liquidity was boosted by transferring about USD 1.25 billion from general reserves to retained earnings at its 65% subsidiary, Hindustan Zinc Ltd, contributing to a stronger operating performance than initially anticipated. The company is expected to reduce its debt by another USD 1 billion over the next 12 months while maintaining sustainability in its capital structure and debt servicing.

(With inputs from agencies.)