Vedanta slips nearly 3% after Moody's downgrades its parent company's rating

Vedanta Share Price: Vedanta shares slipped in morning deals on BSE on Wednesday (January 10, 2024) after brokerage Moody's downgraded the rating of its parent company, Vedanta Resources. The stock was trading lower by 2.78 per cent, or Rs 7.25, at Rs 253.20 at 9:33 am on Wednesday.

Moody's Investors Service said on Tuesday that it had downgraded its rating on the senior unsecured bonds issued by Vedanta Resources to Ca from Caa3.

The brokerage has also downgraded the rating for the Corporate Family Rating (CFR) of Vedanta Resources to Caa3 from Caa2.

"We view the debt restructuring as default avoidance and assess that the creditors have incurred an economic loss with respect to the original promise. We consider the transaction to be a distressed exchange under our criteria, which underpins our downgrade of VRL's ratings," Moody's Senior Vice President Kaustubh Chaubal said in a statement.

Vedanta Resources' current situation 

• The rating was also downgraded twice in 2023
• The company's liquidity problems may increase in the next 24 months
• Vedanta Resources has a debt of about Rs 53216 crore
• Loans worth Rs 37000 crore are to be repaid by FY25
   

(With inputs from agencies)