Vedanta Resources rating upgrade: S&P Global lifts issuer rating to BB after demerger

S&P Global Ratings said Vedanta Resources Ltd had its credit ratings raised to BB from B+. The agency cited a stronger financial position and lower costs after the demerger. It also pointed to refinancing moves and ongoing debt reduction. S&P said the changes reflected steadier operations and better cost structures at the London-based company.

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The agency also explained what the grades mean for investors. S&P Global Ratings said BB stayed a speculative, non-investment grade rating. It meant the issuer was less exposed to non-payment than B or CCC. Yet, it still faced large uncertainties. S&P said a B+ instrument carried high speculative risk.

S&P Global Ratings upgrade for Vedanta Resources and what changed

"On May 14, 2026, S&P Global Ratings raised its long-term issuer credit rating on Vedanta Resources to BB from B+. At the same time, we raised our ratings on the company's senior unsecured notes to BB- from B,\" the statement said. S&P added that Vedanta’s stronger financial operations supported the revision. It linked the move to lower costs and debt reduction.

S&P kept a stable outlook on the company. The agency said the view depended on better cash flow, refinancing planning, and further deleveraging. It also tied the outlook to the company’s recent progress after the group demerger. S&P said these steps supported a steadier financial profile over time.

S&P Global Ratings upgrade linked to Vedanta Resources aluminium costs

S&P said a key driver was better cost competitiveness and earnings strength. The agency highlighted aluminium as a main factor behind the upgrade. It said a stronger earnings mix and lower costs supported margins. S&P also cited improvements in product mix across metals as another supportive trend.

The agency pointed to progress at the Lanjigarh alumina refinery in Odisha. S&P said the ramp-up should lift captive alumina coverage above 75 per cent. It compared this with about 60 per cent in fiscal 2026. The agency said this should cut aluminium costs by USD 50 per tonne and lift margins.

S&P also noted deeper backward integration into bauxite mining. It said this shift should strengthen margins in a structural way. The agency expected aluminium production costs to fall over the next 12-18 months. It also said higher integration reduced exposure to external input price swings.

S&P Global Ratings upgrade reflects Vedanta Resources product mix and liquidity

S&P said a larger share of value-added products was helping results. It said aluminium and zinc products with higher value were improving realisations. The agency said this added resilience to earnings during weaker cycles. It linked the trend to a better ability to absorb volatility in commodity prices.

S&P also highlighted a stronger liquidity position at Vedanta Resources. It cited more than USD 2 billion in long-term banking lines. The agency also noted over USD 3.5 billion raised in bond markets since late 2024. It added that cash and cash equivalents stood at over USD 3 billion.

With inputs from PTI