Vedanta Surges on Rating Upgrade

5 Sep 2024 , 01:29 PM

Vedanta’s shares climbed 2% on the BSE on Thursday, reaching an intraday high of Rs 469.40, following a news that the business had earned a long-term rating upgrade from ICRA, based on the assumption of improved credit metrics.

The rating for its ‘Longterm/S term -Unallocated limitations’ instrument has been improved to [ICRA]AA from [ICRA]AA-/[ICRA]A1+, with future implications. The Longterm-Fund-based -Term loan instrument was improved to [ICRA]AA from [ICRA]AA-, and it remains on rating watch with potential ramifications. Commercial Paper’s rating was improved to ICRA]A1+, with growing implications.

Recently, the mining major successfully raised $1 billion through a qualified institutional placement (QIP) in July 2024, with an additional $400 million generated by Hindustan Zinc Limited’s (HZL) offer for sale (OFS) in August 2024.

“These monies (QIP and OFS) are expected to be predominantly devoted to deleveraging, resulting in lower total interest expenses for the company. Furthermore, the $500 million raised by Vedanta Resources Limited (VRL) through a stake sale in VDL in July 2024 will assist lower the Group’s total debt load, according to an ICRA note.

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