Vedanta shed 0.74% to Rs 94.20 after India Ratings and Research revised its outlook on the company to negative from stable while affirming its long-term issuer rating at IND AA.
The ratings agency continues to take a consolidated view of Vedanta and its subsidiaries and has factored in the debt of the parent company, Vedanta Resources Plc. (VRL), while arriving at the ratings.
The outlook revision reflects India Ratings' expectation that Vedanta's credit metrics will remain weaker than expected levels in the near term owing to the delay in volume ramp-up and fall in commodity prices.
It further said that a strong EBITDA performance, driven by the company's ability to ramp-up volumes and reduce CoP, with a substantial increase in raw material input linkages, leading to the consolidated net leverage falling below 3.0x, all on a sustained basis, may lead to a resolving the negative outlook to stable.
However, the events (either individually or collectively) like the consolidated net leverage remaining above 3.0x on a sustained basis, substantial reduction in financial flexibility due to build-up of leverage at intermediate and or ultimate parent level and delays in easing the repayment profile could lead to a negative rating action.
Vedanta is a diversified natural resources player, with a significant presence in zinc, oil and gas, copper, aluminium, iron ore, and power.
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