Vedanta Share Price Plunges 6% To 52-Week Low; Here’s Why

Anil Aggarwal promoted Vedanta shares fell 6% to a 52-week low to Rs 210 on NSE, on September 27, Wednesday. Vedanta stock plunged after global rating agency Moody’s Investor Service downgraded the corporate family rating of Aggarwal promoted company from Caa1 to Caa2.

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According to Moody’s scale, Caa indicates obligations judged to be speculative of poor standing and are subject to very high credit risk, with the modifier '1' which indicates a higher end and '3' signaling lower end of the rating category.

According to reports, Vedanta stock has slipped 24% in the last three months, against a 5% rise in benchmark Sensex. The stock had touched a 52-week low at Rs 222 per piece in September last year.

Furthermore, Moody's has lowered the credit rating for senior unsecured bonds issued by Vedanta Resources Limited (VRL) and its wholly-owned subsidiary, Vedanta Resources Finance 11 Plc, guaranteed by VRL, from Caa2 to Caa3. Concurrently, they have retained a 'negative' outlook.

“The downgrade reflects elevated risk of debt restructuring over the next few months because VRL has not made any meaningful progress on refinancing its upcoming debt maturities, in particular the $1 billion bonds maturing each in January 2024 and August 2024,” Moody’s said in a statement.

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In March this year, Crisil had downgraded its outlook from stable to negative due to the possibility of higher-than-expected financial leverage and lower financial flexibility of the company.

Meanwhile, India Ratings also revised its outlook on the company to negative due to elevated risk of refinancing at an increased cost of borrowing.