In a significant vote of confidence for Vedanta Limited , two leading credit rating agencies, Crisil and ICRA, have reaffirmed their ratings for the mining conglomerate. This development comes in the wake of allegations made by US short-seller Viceroy Research, which had claimed Vedanta was 'financially unsustainable'.

Rating Reaffirmations

Crisil has maintained its 'CRISIL AA / Watch Developing / CRISIL A1+' ratings for Vedanta Limited. The agency also reaffirmed its 'AAA' rating for Hindustan Zinc, a subsidiary of Vedanta. Similarly, ICRA has reaffirmed its 'ICRA AA / Watch Developing / ICRA A1+' ratings for Vedanta.

Independent Evaluation

Both rating agencies conducted independent evaluations following the short-seller report. Crisil noted that it found no adverse reaction from lenders or investors. The agency stated, "CRISIL has its credit ratings outstanding on multiple entities of the Vedanta group, and all have been reaffirmed."

Financial Performance

ICRA highlighted the Group's commitment to debt reduction, noting that Vedanta's leverage ratio (Net Debt/OPBDITA), including Vedanta Resources Limited's debt, improved to 2.5x in FY 2025 from 3.2x in FY 2024. The agency also emphasized Vedanta's healthy profitability, particularly in its aluminium and zinc operations.

Debt Refinancing

ICRA pointed out that recent refinancing at Vedanta Resources Limited (VRL) has effectively smoothened the debt maturity profile and is expected to reduce finance costs from FY 2026 onwards.

Short-Seller Allegations

The reaffirmations come after US short-seller Viceroy Research claimed Vedanta was 'financially unsustainable'. Vedanta had dismissed these allegations as 'selective misinformation and baseless allegations.'

Management Response

In response to the short-seller report, Vedanta's management stated that the allegations were baseless and that the transactions in question had appropriate commercial substance. The company affirmed that these transactions were approved and in compliance with contractual obligations and applicable laws and regulations.

Legal Opinion

To further address the allegations, Vedanta Limited obtained an independent legal opinion from Hon'ble Mr. D.Y. Chandrachud, Former Chief Justice of India. The company has submitted this legal opinion to the stock exchanges and made it available on its website.

The reaffirmation of credit ratings by Crisil and ICRA underscores the financial community's continued confidence in Vedanta's business stability and performance, despite recent challenges posed by short-seller allegations.

Vedanta Limited , a major player in the Indian natural resources sector, has secured a significant legal victory in an ongoing oil field arbitration case. The Delhi High Court has ruled in favor of Vedanta, allowing the company to proceed with financial adjustments related to the dispute.

Key Developments

• The Delhi High Court has rejected a plea to halt Vedanta's deductions in the oil field arbitration case.
• Vedanta is now permitted to adjust an additional USD 157.00 million, on top of the USD 377.00 million it has already adjusted.
• This decision appears to be favorable for Vedanta, strengthening its position in the arbitration proceedings.

Financial Implications

The court's ruling allows Vedanta to make substantial financial adjustments totaling USD 534.00 million (USD 377.00 million + USD 157.00 million). This development could have significant implications for the company's financial position and its ongoing operations in the oil and gas sector.

Industry Context

This case highlights the complex legal and financial challenges often faced by companies in the natural resources sector, particularly in relation to oil field operations and arbitration proceedings. The outcome of such cases can have far-reaching effects on a company's financial health and operational strategies.

Looking Ahead

While this ruling marks a positive step for Vedanta in the arbitration process, it's important to note that the full details and potential long-term impacts of the case are yet to be fully understood. Stakeholders will likely be watching closely for any further developments in this ongoing legal matter.

Vedanta Limited, known for its diversified portfolio in oil and gas, zinc, lead, silver, copper, iron ore, steel, and aluminium, continues to navigate complex legal and operational challenges as it pursues its business objectives in the natural resources sector.