“However, Crisil Ratings understands that the VRL is in process of refinancing the bonds maturing in January 2024 ($1 billion), August 2024 ($0.95 billion) and March 2025 ($1.2 billion). This can potentially reduce the refinancing pressure on VRL, thereby reducing the need for significantly large annual dividend payouts by Vedanta over the medium term,” the report notes.

The agency opines that VRL’s debt refinancing is expected to be completed during the current quarter of fiscal 2024 and the same will be a key monitorable and a rating sensitive factor. 

In September, the board of Vedanta gave a nod to split the business into six separately listed entities. As per the proposed demerger, Vedanta will be split into Vedanta Aluminum, Vedanta Oil and Gas, Vedanta Power, Vedanta Steel and Ferrous Materials, Vedanta Base Metals and Vedanta Ltd, which will be listed as separate entities on domestic bourses. The demerger is planned to be a simple vertical split, for every 1 share of Vedanta Ltd, the shareholders will additionally receive 1 share of each of the 5 newly listed companies.

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