Fitch Ratings has affirmed UK-based Vedanta Resources Limited’s (VRL) Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B+’ with a Stable Outlook, citing the company’s improved liquidity position, significant reduction in refinancing risk, disciplined debt reduction, improved funding access, and sustained cash flows from key operating subsidiaries.
The rating agency also affirmed VRL’s senior unsecured rating at ‘B+’, The agency also reaffirmed ‘B+’ ratings on the USD 300 million June 2028 bonds and USD 500 million December 2031 bonds issued by VRL.
Fitch noted that VRL’s refinancing risk has eased significantly over the past two years, with the next bond maturity three years away in June 2028. Per the report, VRL’s debt has declined to around USD 5 billion as of FYE25 from USD 9 billion as of FY22, with further reduction of USD 1 billion expected by FY27. The company raised USD 1.1 billion in syndicated loan facilities in FY26 to refinance debt at interest rates below 10%, reflecting stronger funding access.
“We estimate VRL’s proportionately consolidated EBITDA net leverage improved to below 4.0x in FY25 (FY24: 5.1x) on higher EBITDA. We forecast leverage to remain broadly flat in the next two years.” Fitch said in its rating rationale. Fitch does not expect the US tariffs to have a material impact on VRL due to the Group’s low direct revenue exposure to the region.
Fitch acknowledged VRL’s improved financial discipline and funding access, stating that the mining major has undertaken proactive liability management exercises over the last two years, which indicates an improvement in the financial discipline, and a longer record of prudent financial management could result in a higher rating for VRL.
Fitch’s stable outlook on VRL follows other major global financial institution’s positive stance on the Vedanta Group’s credit profile. Barclays last month had maintained an ‘overweight’ rating on bonds issued by Vedanta Resources and its group companies, citing the Group’s consistent steps towards deleveraging, lowering cost of debt, and corporate actions that have supported creditors and bond prices. Recently, Bank of America (BofA) Global Research too maintained a positive recommendation on securities issued by Vedanta Resources Ltd and its subsidiary, citing reduced holding company liquidity risk, cheaper debt, and lower reliance on dividends in the future. Similarly, credit rating agencies such as CRISIL and ICRA also reaffirmed their ratings on Vedanta Ltd., citing various positive factors.
