Vedanta Achieves Highest Domestic Credit Rating in 12 Years on ICRA Upgrade to AA+

Vedanta Group has clinched its strongest domestic credit rating in more than a decade following a significant upgrade from ICRA, the Moody's-affiliated rating agency. The group's long-term ratings for Vedanta Limited (VEDL) and Vedanta Aluminium Metal Limited (VAML) have been elevated to AA+ with a Stable outlook, marking a watershed moment in the company's financial trajectory.

Talwandi Sabo Power Limited (TSPL), another key entity within the group, received an upgrade to AA-/Stable from its previous A+/Watch Developing status. The agency simultaneously reaffirmed Vedanta's short-term rating at the highest tier of A1+.

This latest rating action represents the company's strongest domestic credit standing since 2014. The two largest businesses created through the demerger framework have now secured AA+ ratings, collectively accounting for over 75 per cent of the group's long-term debt obligations.

ICRA's decision was underpinned by several factors. The agency pointed to Vedanta's enhanced profitability driven by solid operational results, a strengthening liquidity position, and greater financial flexibility across its core businesses. The outlook for FY27 appears favourable, supported by commodity market conditions that are expected to remain constructive, cost improvements, and clear earnings visibility in the aluminium, zinc, and oil and gas sectors.

The refinancing landscape has also shifted in Vedanta's favour. The company has benefited from lower borrowing expenses, timely debt repayments, and extended maturity profiles. Interest costs declined by approximately 200 basis points during FY26, substantially easing debt servicing obligations and mitigating refinancing risks at the promoter level. This positions Vedanta to advance its final refinancing phase with an emphasis on reduced costs and extended tenors.

ICRA assigned a Stable Outlook to the ratings while lifting the Watch designation that had been in place during the demerger process, which became effective on May 1st. The demerger framework is anticipated to yield more specialised, independently viable businesses with stronger capital allocation practices and enhanced financial room for manoeuvre. The agency has also signalled that Vedanta Oil and Gas, the other significant demerged entity, could potentially achieve an AA+ rating.

The upgrade reflects mounting enthusiasm from both domestic and international lenders keen to participate in Vedanta's refinancing initiatives, demonstrating strengthened confidence in the group's financial durability and medium to long-term expansion trajectory.

Vedanta's operational footprint spans zinc, silver, aluminium, copper, nickel, iron ore, oil and gas, and power generation. ICRA cited the group's size, business spread, and cost-competitive production capabilities as fundamental strengths supporting its long-term credit standing. The upgrade reinforces expectations of a more robust balance sheet as Vedanta progresses through its demerger and prepares for sustained growth in sectors tied to industrial consumption, the clean energy transition, and high-demand minerals.

The positive momentum extends globally. Within the past two months, major international rating agencies—S&P, Moody's, and Fitch—have upgraded Vedanta Resources, the holding company of Vedanta Ltd. This wave of upgrades underscores widening international recognition of the group's strengthening financial health, improved cash position, and promising long-term growth prospects.