CRISIL upgrades Vedanta Group companies, lifts flagship firm's rating to highest level in over a decade

The latest action reflects CRISIL's assessment of the group's stronger financial position following the demerged structure.

Vedanta Group has received a major credit rating boost from CRISIL Ratings, with its flagship company, Vedanta Limited, securing its highest long-term rating in more than a decade. The ratings agency also upgraded key group entities across aluminium, oil and gas, and power businesses, while removing Vedanta Limited, Vedanta Aluminium and Vedanta Oil & Gas from "Rating Watch with Developing Implications".

The latest action reflects CRISIL's assessment of the group's stronger financial position following the demerged structure, lower leverage and sustained earnings across its core businesses.

Vedanta Limited gets highest rating since 2014

CRISIL upgraded the long-term rating of Vedanta Limited to AA+/Stable, marking the company's strongest credit profile since 2014.

The agency said the company continues to benefit from its scale and diversified operations, supported by its 61 per cent stake in Hindustan Zinc and businesses spanning copper, nickel, ferroalloys and critical minerals.

Highlighting the company's balance sheet, CRISIL said, "The company's financial profile remains strong, with net leverage improving significantly to 0.7x as of 31 March 2026 under the demerged structure. Despite planned growth capital expenditure, leverage is expected to remain comfortably below 1.0x over the medium term."

It further added, “The lower leverage, together with sustained earnings and cash flow generation from Hindustan Zinc, has strengthened the company's financial profile and enhanced its financial flexibility, supported by the substantial market value of its investment.”

Vedanta Aluminium was also upgraded to AA+/Stable, with CRISIL highlighting the company's dominant position in India's aluminium industry.

According to the agency, the company remains the country's largest aluminium producer and the world's third-largest producer outside China, accounting for nearly 48 per cent of the domestic market.

"Operating profitability rose to a record high in fiscal 2026, with the company reporting EBITDA of ₹25,208 crore, reflecting a 43% on-year increase from fiscal 2025."

The agency expects the company's financial position to remain healthy, saying “net leverage to remain below 1-1.25 times and interest coverage ratio above 8 times in fiscal 2027.”

Vedanta Oil & Gas also received an upgrade to AA+/Stable, with CRISIL saying the company has emerged with one of the strongest financial profiles within the group.

The ratings agency noted, "Under the demerged structure, the company reported an estimated EBITDA of ~Rs. 4,350 crore in fiscal 2026. Following the demerger, the business has been allocated limited debt and has come to a net cash position."

CRISIL further said, "Debt levels are expected to remain broadly stable and net debt to EBITDA is expected to remain negative over the medium term," citing strong cash generation and disciplined capital allocation.

Vedanta Power's guaranteed long-term bank facilities were upgraded to AA+(CE), with CRISIL attributing the improvement to the stronger credit profile of guarantor Vedanta Limited.

The agency also cited the company's "strong contracted portfolio and fuel security arrangements", noting that its Talwandi Sabo power plant maintained plant availability of 83 per cent in fiscal 2026, above the level required for full fixed-charge recovery under its long-term power purchase agreement.

Meanwhile, ESL Steel Ltd, a subsidiary of Vedanta Iron & Steel, retained its AA/Stable rating.

Commenting on the broader group, CRISIL said Vedanta's diversified portfolio across zinc, silver, lead, aluminium, copper and nickel continues to strengthen its operating profile.

"Vedanta Group has a diversified metals portfolio spanning zinc, silver, lead, aluminium, copper and nickel. The large scale of operations with a healthy market share in the domestic aluminium and zinc businesses and the cost-efficient operations in these segments strengthen the Group's operating profile."

On parent company Vedanta Resources, the agency said, "the Group's financial flexibility has improved significantly post demerger with the substantial market value of Vedanta Resource's shareholdings in the demerged entities translating into a market value cover of ~5.6 times against its net debt as on June 30, 2026."

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