Vedanta declines as S&P puts ratings of Vedanta Resources PLC on credit watch

Vedanta dropped 2.2% to Rs 97.65 at 10:50 IST on BSE after global credit rating agency Standard & Poor's placed its ratings on London-headquartered Vedanta Resources PLC on credit watch with negative implications.

Shares of Cairn India were down 1.34% at Rs 147.70.

Meanwhile, the S&P BSE Sensex was down 337.20 points or 1.31% at 25,382.38.

On BSE, so far 4.48 lakh Vedanta shares changed hands compared with average daily volume of 10.18 lakh shares in the past two weeks.

The stock hit a high of Rs 98.50 and a low of Rs 95.10 so far during the day. The stock had hit a 52-week low of Rs 76.70 on 25 August 2015. The stock had hit a 52-week high of Rs 291.25 on 12 September 2014.

According to Standard & Poor's (S&P), the merger of Cairn India with Vedanta Ltd. is critical for Vedanta Resources PLC to withstand a weakness in global commodity prices. Vedanta Resources PLC is a London-headquartered oil and metals company with most of its operations in India. According to S&P, the merger of Cairn India with Vedanta Ltd. will strengthen Vedanta Resources PLC's financial metrics. According to the rating agency, there is uncertainty about the conclusion of the merger of Cairn India with Vedanta Ltd. The uncertainty will remain until a voting on the merger by the shareholders of the two companies. S&P expects the voting on the merger to take place in the latter half of Q3 December 2015.

On consolidated basis, Vedanta Ltd's net profit rose 130.6% to Rs 865.94 crore on 0.6% decline in net sales to Rs 16951.88 crore in Q1 June 2015 over Q1 June 2014.

Vedanta Ltd. (formerly Sesa Sterlite) is a diversified natural resources company. The company produces zinc, lead, silver, copper, iron ore and aluminium.

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