Vedanta shares hit 52-week high after ICRA upgrades ratings post demerger

Shares of Vedanta Ltd climbed 1.72 per cent in Friday's early trade to hit a 52-week high of Rs 360.70 after credit rating agency ICRA Ltd upgraded its long-term credit rating on the company to ICRA AA+ with a stable outlook following the group's ongoing demerger exercise.

The mining major, which has demerged into four separate entities with their listings still awaited, saw the upgrade driven by what ICRA described as a material improvement in its credit profile in FY26, with further strengthening expected in FY27.

ICRA assigned an ICRA AA+ rating with stable outlook to Vedanta Aluminium Metal Ltd, one of the demerged entities. Talwandi Sabo Power Ltd, which is set to be listed as Vedanta Power Ltd, received an ICRA AA- rating with stable outlook.

According to the rating agency, favourable price-cost dynamics for Vedanta group companies are expected to significantly improve the group’s financial performance, capital structure, liquidity position and debt coverage metrics.

It also noted that the refinancing ability of the Vedanta group has improved materially, leading to a sharp easing in average interest costs during FY26.

"Moreover, the refinancing risk at Vedanta Resources Ltd (VRL) has also reduced significantly in the last few years supported by repayments and elongation of the debt maturity profile," ICRA said.

ICRA further removed Vedanta's ratings from watch with developing implications, citing improved clarity on the allocation of assets and liabilities under the demerger scheme as well as the support framework among group entities.

The agency also upgraded Vedanta’s long-term rating based on expectations of further strengthening in the group’s credit profile in FY27.

"This has been supported by a sharp increase in base metal prices, which has contributed to a strong financial risk profile for the Group, which reported an OPBDITA of $6.7 billion in FY2026. Considering the proportionate consolidation of Hindustan Zinc Ltd, the OPBDITA still remained healthy at $5.7 billion in FY2026, compared to ~$3.8 billion in FY2025," ICRA said.

Post demerger, ICRA expects the group's stronger cash-generating entities to continue supporting dividend requirements, while maintaining flexibility to fund them through other group entities if needed.

Further, the rating agency said it expects intra-group support among Vedanta entities to continue going forward, if required.