Yet Another Jolt For Vedanta Resources In Just One Week

There is yet another setback for Vedanta Resources Ltd (VRL) in just a span of one week. After Moody's Investors Service downgraded Vedanta Resources' corporate family rating (CFR) from Caa1 to Caa2 over elevated risks of debt restructuring on September 27, 2023 now S&P Global Ratings has also downgraded it.

According to reports, leading global ratings agency S&P Global Ratings reduced Vedanta Ltd's UK-based parent Vedanta Resources Ltd (VRL) to "CCC" from "B-" on September 29. S&P Global downgraded the rating of diversified natural resources company amid potential bond extensions and has also placed it under 'credit watch'.

It is worth noting that CCC rating reflects weakness in accomplishing its financial commitments. "We have... lowered our long-term issuer credit rating on Vedanta Resources and the issue rating on the company's outstanding debt to 'CCC' from 'B-'. We also placed the ratings on credit watch with negative implications," said S&P Global Ratings.

Vedanta Resources began talks with bondholders pertaining to maturities of bonds worth approximately $3 billion. "We believe VRL remains committed to avoid a payment default. We could assess such a liability management transaction," added S&P Global Ratings.
Earlier on September 27, Moody's Investors Service downgraded the corporate family rating of parent Vedanta Resources to Caa2 from Caa1. Moody's also maintained a "negative" outlook.

"The downgrade reflects the elevated risk of debt restructuring over the next few months because VRL has not made any meaningful progress on refinancing its upcoming debt maturities, in particular the USD 1 billion bonds maturing each in January 2024 and August 2024," stated Kaustubh Chaubal, a Moody's Senior Vice President and lead analyst on VRL.

Vedanta Limited Stock Outlook & Return: Meanwhile, Vedanta Limited gained 6.84% to Rs 222.50 per share on Friday, September 29, 2023. Its 52-week high price is Rs 340.75 per share and 52-week low price is Rs 207.85 per share, respectively. Its market capitalisation is Rs 82,707.63 crore. Vedanta stock declined 29% YTD and declined 14% in last 1-year. In last 2-years, Vedanta shares fell again by 23% and gained 58% in last 3-years.

Vedanta Dividend History: Vedanta has announced 40 dividends since July 23, 2001. In last 12-months only, the company declared an equity dividend amounting to Rs 69.00 per share. If the current market price of Vedanta stock is taken into consideration, it offers a dividend yield of 33.01%, according to data obtained from Trendlyne. Earlier this year in August, Vedanta Resources sold nearly 4.3 stake in Vedanta for whopping $500 million to cut the pressure caused from its forthcoming cash requirements.

Vedanta About: Vedanta Limited is one of the world's foremost natural resources conglomerates, with primary interests in aluminium, zinc-lead-silver, oil and gas, iron ore, steel, copper, power, ferro alloys, nickel, semiconductor and glass. With world-class strategic assets based across India, South Africa, Namibia and Liberia, we are rightly positioned to create long-term value with superior cash flows, according to its official website.