Vedanta’s credit ratings reaffirmed by CRISIL and ICRA

THEBUSINESSBYTES BUREAU

NEW DELHI, JULY 18, 2025  

India’s leading credit rating agencies, CRISIL Ratings and ICRA, have reaffirmed the credit ratings of Vedanta Limited, highlighting the company’s ongoing business stability, solid financial performance, and strong corporate governance.

Notably, CRISIL’s report underscores that, based on feedback from Vedanta’s management and select lenders, there has been no adverse reaction from any investor or lender. CRISIL has reaffirmed its AAA long-term rating for Hindustan Zinc Limited (HZL) and AA for Vedanta Limited. Meanwhile, ICRA has reaffirmed Vedanta’s long-term AA rating.

This reaffirmation comes as a clear rebuttal to recent allegations made by short-seller Viceroy, which accused Vedanta’s parent company, Vedanta Resources, of structural subordination and excessive reliance on dividends to service debt.

The CRISIL report also pointed out that the stock prices of both Vedanta Limited and Hindustan Zinc Limited have recovered since the publication of the Viceroy report on July 9, 2025.

“CRISIL Ratings has acknowledged the short-seller report on the Vedanta group and the subsequent volatility in the share prices of Vedanta Limited and Hindustan Zinc Limited. In response, Vedanta’s management, via a press release dated July 9, 2025, strongly dismissed all allegations. CRISIL notes that both companies’ stock prices have rebounded since the report’s release,” the report stated.

CRISIL currently holds outstanding ratings on 11 entities within the Vedanta group, including Hindustan Zinc, ESL Steel Ltd, Talwandi Sabo Power Ltd, and Sesa Resources Ltd. All ratings have been reaffirmed.

“CRISIL maintains continuous surveillance on all its ratings. The ratings of Vedanta and its subsidiaries remain supported by the strong business profiles of their Indian operations and their healthy financial performance,” the report emphasized.

Similarly, ICRA expressed confidence in the Group’s ongoing commitment to debt reduction. The leverage ratio (net debt/EBITDA), including debt from Vedanta Resources Limited (VRL), improved to 2.5 times in FY2025, down from 3.2 times in FY2024. ICRA expects that strong profitability, particularly from the aluminium and zinc segments, will further improve the Group’s leverage profile.

Additionally, ICRA includes VRL’s total debt and financial expenses when calculating Vedanta Limited’s adjusted leverage and coverage metrics.

According to credit rating methodologies, AAA denotes the highest degree of safety regarding the timely servicing of financial obligations, with the lowest credit risk. AA rating indicates a high degree of safety, with very low credit risk.

Therefore, the allegations regarding Vedanta’s unsustainable debt and financial instability are entirely unfounded and lack credible support. The company’s AAA and AA ratings demonstrate its robust financial health and its exceptional ability to meet obligations on time. These top-tier ratings reflect Vedanta’s financial strength, directly contradicting claims of vulnerability or instability.

At Vedanta Resources Limited’s level, recent debt refinancing has optimized the maturity profile over the long term and is expected to reduce financing costs from FY2026 onwards.