Standard & Poor's Upgrades Vedanta Resources Credit Rating Amid Improved Financials and Demerger Progress
Vedanta Resources Sees Ratings Upgrade to 'BB'
S&P Global Ratings has upgraded the ratings of London-based Vedanta Resources Ltd to 'BB' from 'B+', citing the company's improved financial position and cost efficiency post demerger.
The rating upgrade reflects Vedanta Resources' strengthening financial operations, improving cost structures, proactive refinancing, and continued deleveraging, following the group's demerger. This upgrade indicates a significant improvement in the company's creditworthiness, placing it above the high-yield or "junk" category, below investment grade.
On May 14, 2026, S&P Global Ratings raised its long-term issuer credit rating on Vedanta Resources to 'BB' from 'B+', and simultaneously raised its ratings on the company's senior unsecured notes to 'BB-' from 'B'.
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The stable rating outlook reflects S&P Global Ratings' expectation of improved cash flows, proactive refinancing, and continued deleveraging. The upgrade is underpinned by Vedanta Resources' improving cost competitiveness and strengthening earnings profile, particularly in the aluminium sector.
S&P Global Ratings highlighted the ramp-up of Vedanta Resources' alumina refinery at Lanjigarh, Odisha, which is expected to increase captive alumina coverage to over 75% of internal requirements by the next fiscal year, compared to around 60% in fiscal 2026. This is expected to result in a reduction of USD 50 per tonne of aluminium in production costs, leading to higher margins.
| Rating | Current | Previous |
|---|---|---|
| Long-term issuer credit rating | 'BB' | 'B+' |
| Senior unsecured notes | 'BB-' | 'B' |
The agency also noted that Vedanta Resources' increasing backward integration into bauxite mining is expected to structurally strengthen margins and reduce aluminium production costs over the next 12-18 months. Furthermore, the growing share of value-added products in aluminium and zinc is resulting in higher realisations and earnings resilience.
S&P Global Ratings also highlighted Vedanta Resources' significantly improved liquidity position, supported by over USD 2 billion in long-term banking lines, more than USD 3.5 billion raised through bond markets since late 2024, and cash and cash equivalents of over USD 3 billion.
Investor Takeaway
Investors should consider Vedanta Resources' improved financials and demerger progress as a positive development.
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