Vedanta slips after Moodys revises parent firms outlook to negative

16 Feb 2022 , 02:55 PM

Moodys has affirmed VRLs B2 corporate family rating (CFR) and the B3 rating on the senior unsecured notes issued by VRL and those issued by its wholly-owned subsidiary Vedanta Resources Finance II Plc, and guaranteed by VRL.

The change in outlook to negative reflects holding company VRLs large near-term refinancing requirements amid tightening liquidity in the capital markets, says Kaustubh Chaubal, a Moodys Vice President and Senior Credit Officer. The continued delay in refinancing its upcoming debt maturities with long-term funding raises concerns over the companys liquidity management, even as supportive commodity prices have improved its key financial metrics.

Moodys considers the holdcos persistently weak liquidity and high refinancing needs as signs of an aggressive risk appetite, with implications for the companys financial strategy and risk management, a key component of the rating agencys governance risk assessment framework. Todays rating action considers the impact of VRLs aggressive liquidity management and refinancing practices on its credit profile, which Moodys regards as credit negative.

The affirmation of the CFR reflects the rating agencys view that VRLs operations are solidly positioned with favorable underlying demand and commodity prices that support continued positive free cash flow generation.

Vedanta Group is a global diversified group of companies with presence in metals, mining, oil & gas, power, telecom and glass. Vedanta Group has presence in electronics and technology business through group companies, Avanstrate Inc. and Sterlite Technologies.

On a consolidated basis, the diversified natural resources firms net profit rose 26% to Rs 4,164 crore on 50% increase in net s

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