S&P downgrades Vedanta, Indian arm's stock nosedives after promoter pares stake
₹247.60 apiece on exchanges on Thursday after S&P Global Ratings downgraded the parent firm Vedanta Resources Ltd’s credit outlook from stable to negative on Thursday when Twin Star Holdings Ltd., promoter of Vedanta, sold 15.4 crore shares in the company worth ₹3,983.1 crore to raise funds for repaying dues. Marquee investors including Societe Generale and Copthall Mauritius Investment Ltd bought 2.94 crore and 8.48 crore Vedanta shares from Twin Star at ₹258.5 apiece respectively. Shares of Vedanta Ltd ended 6.65% down at ₹254.05 apiece on NSE, which is 1.72% lower than the floor price at which Societe Generale and Copthall Mauritius Investment purchased the shares from Twin Star.
In a statement put out in Singapore, S&P Global Ratings downgraded Vedanta Resources citing increased funding risks. The rating agency has affirmed 'B-' long-term issuer credit rating for the London-based parent firm. This rating indicates a “relatively higher credit risk", said S&P Global, while affirming its 'B-' long-term issue rating for the senior unsecured debts of Vedanta Resources.
“Vedanta Resources Ltd.'s weakened access to cash flow from its operating subsidiaries at a time of challenging external financing conditions has raised its refinancing risk. The company has about $3 billion of debt due between now and August 2024," said S&P. The agency said that the negative outlook reflects the company's tight liquidity due to its large debt maturities up until March 2025.
“Vedanta Resources is making refinancing progress, but execution risks remain," said the S&P release. “We understand that the company is in discussions to raise further funds in excess of $1 billion. We see material risks, given a challenging funding environment and the
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