Last Updated: March 10, 2023, 15:52 IST
Vedanta is a diversified pure assets firm.
Vedanta Ltd shares tanked over 4 per cent after Moody’s Investors Service downgraded its holding firm
Vedanta Ltd shares tanked over 4 per cent after Moody’s Investors Service downgraded its holding firm Vedanta Resources Limited’s (VRL) company household ranking (CFR) to Caa1 from B3 over rising refinancing dangers in debt maturities. The outlook for the ranking stays adverse.
Vedanta inventory fell 4.54% to Rs 272.55 towards the earlier shut of Rs 285.50 on BSE. Vedanta shares have misplaced 26.43 per cent in a yr and fallen 9.8 per cent for the reason that starting of this yr. Total 5.19 lakh shares of the agency modified fingers amounting to a turnover of Rs 14.48 crore on BSE. Market cap of the agency fell to Rs 1.03 lakh crore.
“Ongoing delays in Vedanta Resources’ refinancing efforts and its continued reliance on dividend receipts are depleting liquidity at its working subsidiaries,” Moody’s said.
Concerns over Vedanta’s debt repayment liabilities surfaced after the government opposed the proposed sale of the international zinc business to Hindustan Zinc.
“We previously expected holdco VRL to find sufficient funds through loans and dividends to address its debt maturities until June 2023. However, VRL faces ongoing delays in obtaining funds relative to our earlier expectations amid a funding environment that remains challenging with high interest rates, scarce market liquidity and tight credit availability,” added Chaubal who can also be Moody’s Lead Analyst for VRL.
“These points expose the corporate to materials refinancing dangers and exacerbate the chance of a cost default or a distressed change.”
In terms of technicals, the relative strength index (RSI) of Vedanta stands at 40, signaling neither the stock is overbought nor oversold. The stock has a one-year beta of 1.4, indicating very high volatility during the period. Vedanta stock is trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
Earlier, S&P Global Ratings stated that the company’s credit ratings might “come under pressure” whether it is unable to elevate $2 billion or promote its worldwide zinc property.
In the scores motion introduced on Friday, Moody’s has additionally downgraded the scores on the senior unsecured bonds issued by Vedanta Resources and its arm Vedanta Resources Finance II Plc to Caa2 from Caa1.
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