Vedanta shares have hit a record high of ₹355, reflecting strong investor confidence in the mining conglomerate's financial turnaround. The company has received a credit rating upgrade to AA+ from ICRA, marking a significant milestone in its financial restructuring journey. This upgrade is primarily driven by Vedanta's improved Net Debt to EBITDA ratio of 0.95 times in FY26, down from 1.22 times in FY25 and over 3 times in FY23. According to ICRA, this ratio means the company could theoretically pay off all its net debt from a single year of operating earnings, representing extremely healthy leverage for a mining and commodities conglomerate of Vedanta's size. The latest rating action marks Vedanta's highest domestic credit rating since 2014, with the agency reaffirming the Group's short-term rating at the highest category of A1+.
Vedanta shares have been trading ex-demerger since April 30, 2026, following a special trading session conducted to discover the price of the residual listed entity after the proposed spin-off. Under the demerger scheme, Vedanta's businesses are being split into five independent companies, with the parent stock now representing only the residual business value. As part of the restructuring, shareholders of Vedanta received shares in four businesses in a 1:1 ratio including aluminium, oil & gas, power, and steel operations. The demerged entities are nearing their listing dates, with the stock rallying nearly 20% in the past 30 days as of May 29 closing level. According to ICRA, this reinforces confidence in the group's strong operational performance along with its robust financial profile and structural efficiencies post-demerger.
ICRA upgraded the long-term ratings of Vedanta Ltd and Vedanta Aluminium Metal Ltd (VAML) to AA+ with a stable outlook, while Talwandi Sabo Power Limited (TSPL) was upgraded to AA- Stable from A+/WatchDeveloping. Together, these two businesses account for over 75% of the group's long-term debt. 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 noted that securities with an AA+ rating are considered to have a high degree of safety regarding the timely servicing of financial obligations, carrying very low credit risk.
The company's Net Debt to EBITDA improvement was achieved through multiple strategic initiatives, including a $1 billion QIP in July 2024, a $400 million OFS of Hindustan Zinc shares in August 2024, and a $500 million stake sale by Vedanta Resources (the UK parent). Additionally, the company executed proactive bond refinancing at lower rates and generated strong operating cash flows from higher base metal prices including aluminium, zinc, and copper through FY25 and FY26. As reported by ICRA, this deleveraging trend is expected to continue in FY27, supported by favourable commodity dynamics and improving cost structures across the aluminium, zinc and oil and gas segments.
The $18 billion conglomerate is set for a historic restructuring that will split into five independent businesses, as reported by Business Standard. Agarwal outlined ambitious expansion plans, stating the group will invest $20 billion over 2-3 years to generate $50 billion in revenue. The demerger will increase aluminium capacity to 60 million tonnes and zinc production from 1 MT to 3 MT. Additionally, the company plans to manufacture 3,000 tonnes of silver compared to the current 700 tonnes, and establish a 1.5 MT fertiliser plant. The restructuring represents a significant milestone as two of the largest businesses emerging from the demerger framework have now secured an AA+ rating, providing strong foundation for their independent operations and future growth prospects.
