Moody's reduced the rating of Vedanta Resources, its impact was visible on the shares
Vedanta Resources Share: Moody's Investors Service has downgraded the rating of Vedanta Resources Limited. This rating has been reduced due to the debt maturity of the company. Moody's has reduced Vedanta's rating from Caa1 to Caa2. Its effect has also been seen in the company's shares. The company's shares had closed with a decline yesterday.
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Moody's Investors Service has downgraded the rating of Vedanta Resources Ltd in the next few months. This rating has been reduced due to increasing debt risk. Moody's said it has downgraded the corporate family rating (CFR) of Vedanta Resources Ltd (VRL) to Caa2 from Caa1.
Moody's has downgraded the company's senior unsecured bond ratings to Caa3 from Caa2. Moody's said that the company will have bonds worth $1-1 billion maturing between January 2024 and August 2024. Let us tell you that Moody's has currently adopted a negative stance.
In August 2023, VRL sold a 4.3 percent stake in key subsidiary Vedanta Limited (VDL) for approximately US$500 million to relieve some of the pressure arising from the impending cash needs of the holding company. The rating agency noted that its entire shareholding in VDL and VDL's entire 64.9 percent stake in Hindustan Zinc Limited (HZL), which holds about two-thirds of the group's consolidated cash, has already been pledged, This means that VRL has limited time to mobilize.
Moody's said the subdued commodity price environment will put some pressure on the ability of VRL's operating subsidiaries to generate cash flows. Holding company VRL's liquidity continues to be weak, with management fees and dividends from operating subsidiaries inadequate to meet its rising debt maturities. Liquidity in VRL's subsidiaries also remains weak.
In Wednesday's trading session, the company's shares fell 15.40 points and closed at Rs 208.60 per share.
Vedanta Resources Limited (VRL), is headquartered in London. It is a diversified resources company, with interests primarily in India. Its main operations are run by its 63.8 percent owned subsidiary Vedanta Limited (VDL). Through VRL's various operating subsidiaries, the group produces oil and gas, zinc, lead, silver, aluminum, iron ore, steel, and power.
The company was delisted from the London Stock Exchange in October 2018. VRL is now wholly owned by Volcan Investments Limited. The founding chairman of VRL is Anil Agarwal. His family is a major shareholder of Volcan.
VRL posted revenues of US$18.3 billion for the fiscal year ending March 31, 2023. At the same time, it generated adjusted EBITDA of US $ 4.8 billion.
