S&P Upgrades Vedanta Resources To CCC+ After Debt Restructuring

S&P Global Ratings upgraded Vedanta Resources Ltd.’s long-term issuer credit rating to CCC+ from SD (Selective Default) following the recent extension of three bond maturities.

The rating agency also raised its long-term issue ratings on Vedanta Resources’ outstanding bonds due January 2024, August 2024, and March 2025 to CCC+ from D.

In addition, S&P lifted its long-term issue rating on the diversified natural resources conglomerate’s April 2026 bond, which was not part of the liability management, to CCC+ from CCC. It removed the rating from CreditWatch.

“Completion of the liability management exercise has alleviated refinancing risk for Vedanta Resources, although liquidity risks remain,” S&P said in a statement.

The company's liquidity remains weak due to potentially reduced access to external funding and internal cash flow from operating subsidiaries, it added.

The rating agency said Vedanta Resources has annual external debt maturities of about $900 million at the holding-company level in the fiscal years ending 31 March 2025 and 2026. This is more manageable than its debt maturities of $2.5 billion-$3 billion annually in the fiscal years 2023-2024, it added.

“However, Vedanta Resources' debt maturities in fiscal years 2025-2026 are still meaningful relative to our projected liquidity sources for the company,” S&P said. It estimates a cash flow deficit of about $500 million each in FY25 and the first half of FY26.

The rating agency said its forecasts assume sustainable dividends of $500 million-$600 million that the company will receive annually from 64%-owned subsidiary Vedanta Ltd., about $300 million in brand fee payments, and $800 million-$850 million in annual interest expense initially at the Vedanta Resources level.

Vedanta Resources should be able to meet these deficits, even without immediate external funding, given the strength of the company's businesses and track record of funding, S&P said. The company is also looking at options to improve dividend capacity at its subsidiaries, it noted.

S&P, which earlier downgraded the conglomerate, said its stable outlook on Vedanta Resources reflects the high prospects that the company will meet its debt obligations over the next 12 to 15 months.

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