ICRA upgrades Vedanta’s credit rating to AA+, the highest rating over a decade

Vedanta Group said it has received its highest domestic credit rating in over a decade after ICRA, an affiliate of Moody’s, upgraded the long-term ratings of key group entities to AA+. 

ICRA upgraded the long-term ratings of Vedanta Ltd (VEDL) and Vedanta Aluminium Metal Ltd (VAML) to AA+ with a Stable outlook, while Talwandi Sabo Power Ltd (TSPL) was upgraded to AA-/Stable from A+/Watch Developing. 

The agency also reaffirmed the Group’s short-term rating at the highest category of A1+.

“The latest rating action marks Vedanta’s highest domestic credit rating since 2014 and represents a significant milestone for the Group as two of the largest businesses emerging from the demerger framework have now secured AA+ rating. Together, these two businesses account for over 75% of the group’s long-term debt,” Vedanta Group said in a statement. 

In its rationale, ICRA highlighted Vedanta’s stronger profitability on the back of robust operational performance, improving liquidity profile and enhanced financial flexibility across key businesses. 

The agency expects these trends to continue through FY27, supported by favourable commodity dynamics, improving cost structures and strong earnings visibility across aluminium, zinc and oil & gas businesses.

ICRA also highlighted the strengthening of Vedanta’s refinancing profile through lower borrowing costs, proactive debt repayments and extension of debt maturities. 

The agency highlighted a 200 bps decline in average interest costs in FY26, materially strengthening debt servicing and reducing refinancing risk at the promoter level. This positions the company well to complete its final refinancing phase, targeting lower costs and longer tenors.

The rating agency assigned a Stable Outlook while removing the Watch on the ratings following conclusion of demerger effective May 1st. 

“The demerger is expected to create more focused and independently scalable businesses with stronger capital allocation discipline and improved financial flexibility. The current rating action also indicates potential for the other key demerged entity, Vedanta Oil and Gas to achieve an AA+ rating,” the Group said. 

Vedanta operates across a diversified portfolio spanning zinc, silver, aluminium, copper, nickel, iron ore, oil & gas and power generation. 

ICRA cited the Group’s scale, diversification and cost-efficient operations as key strengths underpinning its long-term credit outlook.