Rating Rationale
April 26, 2023 | Mumbai
Vedanta Limited
Ratings reaffirmed at 'CRISIL AA / Negative / CRISIL A1+ '; rated amount enhanced for Bank Debt
 
Rating Action
Total Bank Loan Facilities RatedRs.56263.5 Crore (Enhanced from Rs.56085.5 Crore)
Long Term RatingCRISIL AA/Negative (Reaffirmed)
Short Term RatingCRISIL A1+ (Reaffirmed)
 
Rs.3000 Crore Non Convertible DebenturesCRISIL AA/Negative (Reaffirmed)
Rs.6444 Crore Non Convertible DebenturesCRISIL AA/Negative (Reaffirmed)
Rs.10000 Crore Commercial PaperCRISIL A1+ (Reaffirmed)
Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings.
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed Rationale

CRISIL Ratings has reaffirmed its ‘CRISIL AA/Negative/CRISIL A1+’ ratings on bank facilities and debt instruments of Vedanta Limited (Vedanta).

 

On March 28, 2023, CRISIL Ratings has revised its outlook to ‘Negative’ from ‘Stable’ due to possibility of higher-than-expected financial leverage and lower financial flexibility with reducing ratio of cash surplus to 1-year maturities for fiscals 2023 and 2024. This is due to increased cash outflow from Vedanta, in the form of dividends, towards large maturing debt obligations at its parent company viz. Vedanta Resources Ltd (VRL; rated 'B-/Stable' by S&P Global Ratings). This is owing to increased refinancing risk at VRL and moderating operating profitability (Ebitda [earnings before interest, tax, depreciation, and amortisation]) of Vedanta.

 

VRL has annual debt maturities of around $3 billion each in fiscals 2024 and 2025 with high near-term maturities of ~ USD 1.7 billion in the first quarter of fiscal 2024. CRISIL Ratings understands that the company is in discussion with lenders for refinancing upcoming maturities of first quarter of fiscal 2024 and as part of its plan company has signed a term-sheet to refinance $1 billion of debt backed by cashflows of subsidiary, Zinc International Ltd. That said, the progress on the refinancing plans have been slower than expected, thereby resulting in increased dividend payout by Vedanta and reduced cash & cash equivalents during the fiscal. Including the recent dividend announced by  Hindustan Zinc Ltd (HZL, Vedanta’s subsidiary; 'CRISIL AAA/Stable/CRISIL A1+’), dividend payout by Vedanta for fiscal 2023 will be more than Rs 40,000 crore (highest ever, including dividend payout by HZL to its minority shareholders). This is expected to result in cash balance of less than Rs 20,000 crore for March 2023 against more than Rs 30,000 crore in March 2022.

 

In case of any further delay in the expected refinancing plan, dependence on dividend payouts by Vedanta will increase; Vedanta currently has cash balances only to cover for VRL’s maturities for the first half of fiscal 2024, and hence will be a key rating sensitivity factor.

 

While maturities of the first quarter of fiscal 2024 should be paid off, CRISIL Ratings understand that VRL will look to part refinance and part repay the maturities beyond the first half of fiscal 2024 as well. However timely closure (at least 3-6 months before) of a credible refinancing/repayment plan for maturities of the second half of fiscal 2024 and thereafter, will be a key monitorable as VRL faces significant refinancing risk till fiscal 2025.

 

Vedanta’s consolidated operating profitability for fiscal 2023 has witnessed moderation due to higher-than-expected cost of production in key businesses such as aluminium and zinc, along with lowering of commodity prices from historical levels of last fiscal. Consolidated Ebitda is likely to drop this fiscal to ~ Rs 35,000 crore from earlier expectation of ~ Rs 38,000-40,000 crore (around Rs 45,000 crore in fiscal 2022). This along with reduced cash balance is likely to result in consolidated net leverage increasing to more than 3 times in fiscal 2023.

 

That said, operating profitability has remained robust and significantly higher than pre-pandemic levels. Further, consolidated Ebitda is expected to increase to more than Rs 40,000-42,000 crore from fiscal 2024, driven by healthy commodity prices that are expected to remain stable around current levels, robust operating rates across key businesses, increased volume growth in aluminium business supported by commissioning of new capacity during fiscal 2024 along with expected reduction in cost of production for aluminium business on the back of alumina refinery expansion and commissioning of captive coal mines.

 

The ratings continue to reflect the expectation that increased operating profitability should support planned capital expenditure (capex), dividend outlay to support part debt repayment for VRL, and is expected to result in net leverage reducing to below 2.6-2.7 times in fiscal 2024 and sustainably below 2.5 times thereafter while improving liquidity from current levels, in the base case.

 

However, slower-than-expected ramp up in Ebitda or delayed/lower-than-expected refinancing by VRL resulting in higher-than-expected dividend outlay during fiscal 2024, could further reduce cash balance as well as net leverage sustaining above 2.6-2.7 times. This will be a key rating sensitivity factor.

 

CRISIL Ratings noted the management’s focus on deleveraging, articulated through the capital allocation policy and other public interactions—including the intent to reduce the debt of VRL by around USD 4 billion by fiscal 2025. VRL has already witnessed debt reduction of ~ USD 2 billion in fiscal 2023. Thus, expected reduction in consolidated gross and net debt (including the debt at VRL) should support financial flexibility of Vedanta and VRL over the medium term and will be a key monitorable. Further updates on actions taken by the promoters to enhance the corporate structure and the consequent impact on leverage will bear watching.

 

The ratings also consider the strong business risk profile of Vedanta, driven by its diversified presence across commodities, cost-efficient operations in the domestic zinc and oil and gas businesses, improving profitability in the aluminium business and large scale of operations. These strengths are partially offset by high debt, large capex and dividend and susceptibility to volatility in commodity prices and regulatory risk.

Analytical Approach

CRISIL Ratings has combined the business and financial risk profiles of Vedanta and its subsidiaries, collectively known as the Vedanta group, as they have operational and financial linkages. Key subsidiaries include HZL; the group's zinc business in Namibia and South Africa (termed Zinc International); Bharat Aluminium Company Ltd (Balco; 'CRISIL A1+’); Talwandi Sabo Power Ltd (‘CRISIL AA (CE)/Negative/CRISIL A1+ (CE)’); and ESL Steels Ltd (‘CRISIL AA/Negative/CRISIL A1+’).

 

CRISIL Ratings has included the debt of VRL (estimated at around USD 7.4 billion [excluding outstanding ICL of USD 450 million] or around Rs 61,000 crore as on February 28, 2023) while calculating the adjusted debt. This is because despite no legal recourse of VRL’s debt holders to Vedanta, this debt needs to be serviced using the dividend outflow from Vedanta or refinanced, based on the implicit strength of the investments held by VRL, primarily Vedanta.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

Key Rating Drivers & Detailed Description

Strengths

  • Diversified business risk profile

The Vedanta group is present in various businesses spanning zinc, lead, silver, aluminium, oil and gas, iron ore, power and steel. The group is among the largest producers in all these segments and, thus, commands a strong market position in India. A well-diversified business risk profile cushions it from commodity-specific cyclicality and risks.

 

  • Low-cost position of key businesses

The domestic zinc, lead and silver businesses are supported by low cost of production, large reserve and continued resource addition. Profitability in the oil and gas business is aided by low operating cost and a business model that ensures recovery of capex. Cash flow in this business will be driven by capex-led improvement in volume over the medium term.

 

The Delhi High Court, through its order dated March 26, 2021, had ruled in favour of the government in the dispute over additional 10% profit from petroleum demanded by the government under the profit-sharing contract (PSC) extension policy for the Rajasthan block. This led to increased cash outflow toward profit sharing at 60% with Government of India. While the court order shall result in reduced profit margin for the oil and gas business, profitability should still remain healthy. Notably, the government was providing only short-term extensions for continuity of operations in the Rajasthan block.  However, the government has extended the PSC contract for the Rajasthan block during fiscal 2023, for 10 years, effective post May 2020. This shall remove the element of uncertainty towards continuity of operations for the Rajasthan block. Furthermore, additional claim of dues related to disallowed cost, raised by the Directorate General of Hydrocarbons, is under arbitration.

 

  • Improving integration to support operating profitability in the aluminium business, which may moderate in fiscal 2023 due to higher power cost and lower realisation, but should improve going ahead

Improved linkage coal sourcing (over 70% in fiscals 2021 and 2022 from 45% in fiscal 2018) reduced coal prices, while lower cost of imported alumina improved cost efficiency for the aluminium business (Ebitda of over USD 525 per tonne during fiscal 2021 against less than USD 150 per tonne in fiscal 2020). With improved production rates, continued cost efficiency and strong aluminium realisation, Ebitda per tonne for the aluminium business of Vedanta further increased to over USD 1,000 in fiscal 2022.

 

However, in the first nine months of fiscal 2023, increased power cost due to lower materialisation of linkage coal and higher coal cost in the market (power cost increasing to around $1000/tonne in the first nine months, compared with around $700/tonne in fiscal 2022) led to increased cost of production (CoP) to more than $2,400/tonne as compared to average CoP of $1,858/tonne in fiscal 2022. This, along with lower aluminium realisations, resulted in reduced Ebitda margin for the aluminium business with Ebitda per tonne declining to around USD 280 per tonne during the first nine months of fiscal 2023 from more than USD 1,000 in fiscal 2022.

 

However, with gradual improvement in domestic coal availability (linkage coal materialisation is understood to have improved to more than 90% post second quarter of the fiscal), and operationalisation of captive coal mines at Jamkhani coal mine, Radhikapur (west) coal block and Kuraloi (A) north coal block in Odisha during fiscals 2023 and 2024, and the focus on increasing local bauxite and alumina sourcing is expected to enhance cost efficiency over the medium term. Moreover, Vedanta has emerged as the highest bidder for Ghorgharpalli and its Dip Extension Coal Block in Sundargarh, Odisha, which will improve coal security for the aluminium business. This, along with ongoing expansion in the refinery capacity to 5 million tonne per annum (MTPA) from 2 MTPA, should enhance operating efficiency next fiscal onwards. Any material delay in structural improvement in operational integration of the aluminium business resulting in lower-than-expected improvement growth in the profitability of the business segment will remain a key monitorable.

 

  • Expected strong volume growth expected over the medium term with capital allocation towards value-accretive zinc, aluminium and oil and gas businesses

Increased mined metal capacity of 1.2 MTPA in domestic zinc, along with ramp-up of Gamsberg’s operations in Zinc International, will support the ramp up in volume. Furthermore, expected addition of new wells and surface facilities during fiscals 2023 and 2024 should increase volume for the oil and gas business over the medium term. Further, Vedanta is undertaking brownfield expansion of its aluminium smelter capacity by 414 kilo tonne per annum (under Balco). Expansion of aluminium refining capacities to 5 MTPA from the existing 2 MTPA is expected to be completed by fiscal 2024. This would further support volume growth over the medium term. Healthy volume growth is likely to make the overall business risk profile more resilient.

 

Weaknesses

  • Large dividend payout to support debt maturities at VRL along with significant capex, resulting in high leverage over the past years; though expected to improve going ahead

Continued assistance through dividend payout to the parent, VRL, to support the latter’s debt has resulted in significant cash outflow to minority shareholders. Though Vedanta has undertaken significant annual capex (about Rs 13,500 crore and Rs 9,000 crore in fiscals 2022 and 2021, respectively) more than proportionate boost in profitability improved net leverage to 2.2 times as on March 31, 2022 (3.1 times a year ago). Capex (including sustenance capex) increased to around Rs 12,200 crore in the first nine months of fiscal 2023 and is expected to remain significant over the medium term (Rs 15,000-20,000 crore in fiscals 2023 and 2024, towards growth capex in the aluminium, zinc and oil and gas businesses. This along with moderation in operating profitability and higher-than-expected dividend payout will increase leverage this fiscal. However net leverage may drop below 2.7 times next fiscal and to below 2.5 times over the medium term, with expected improvement in profitability and continued focus on deleveraging. However, profitability remains susceptible to volatility in the prices of metals and oil and gas. Any material acquisition or higher-than-expected cash outflow to support VRL will remain a key monitorable.

 

As per the capital allocation policy of Vedanta and as articulated by the management, potential strategic growth acquisition of Bharat Petroleum Corporation Ltd, if it happens, and proposed entry in the semi-conductor and display production business (recently formed joint venture between the Vedanta group and Foxconn) will not be done through Vedanta or its parent and will not be linked with the balance sheets of Vedanta or its parent entities. However, further developments on this front remain a monitorable.

 

  • Exposure to changes in regulations

The businesses are vulnerable to regulatory risk. The copper smelting plant at Thoothukkudi in Tamil Nadu has been shut since May 2018 following a directive from the Tamil Nadu Pollution Control Board. Suspension of the iron ore mining operations in Goa currently, and in Karnataka in the past, have adversely impacted the iron ore business. Furthermore, the March 2021 order of the Delhi High Court on PSC extension, ruling against the company, will reduce the profit margin for the oil and gas business.

Liquidity: Adequate

Liquidity of Vedanta remains healthy

Cash accrual, projected at around Rs 28,000 crore (pre-dividend payout) in fiscal 2023 and more than Rs 30,000 crore (pre-dividend payout) in fiscal 2024, comfortably covered Vedanta’s term debt obligation of 4,800 crore for the second half of fiscal 2023 and is also expected to cover Rs 10,800 crore for full fiscal 2024. Cash balance was Rs 23,474 crore (net of inter-company loans to VRL) as on December 31, 2022. However, a part of the cash is held by HZL, which is accessed through dividends and thus results in outflow towards minority shareholders. However, post the dividend payouts during the fourth quarter of fiscal 2023, including the recent dividend announcement by HZL, the cash balance is expected to reduce to less than Rs 20,000 crore in March 2023. That said, flexibility towards capex and significant unutilised bank limit (around Rs 11,000 crore as on December 31, 2022) supports Vedanta’s liquidity. Vedanta may also look to refinance a significant portion of its principal debt obligation in fiscals 2023 and 2024, based on its strong banking relationship and refinancing track record.

 

Liquidity for parent, VRL witnessing moderation

The parent, VRL, has an annual interest expense of around Rs 5,500 crore (around USD 650-700 million) towards its outstanding debt, which is mainly serviced through dividends received from Vedanta and partly through management and brand fee received from Vedanta. Debt repayments of the parent in fiscal 2023 were serviced through a mix of refinancing and dividend received from Vedanta. That said, VRL, has near-to medium-term refinancing risk with scheduled debt repayment of ~USD 3.0 billion in fiscals 2024 and 2025 (including upcoming bond maturity of USD 900 million in April and May 2023). With reducing cash balance at Vedanta, the ratio of cash surplus to 1-year maturities of VRL is reducing, thereby constraining the financial flexibility of VRL. However, VRL is expected to refinance/part repay the same in a timely manner. Debt reduction at VRL will be supported by mix of dividend payouts by Vedanta and strong banking relationships and track record of refinancing by VRL. However, any delay in expected timelines for refinancing or repayment for VRL’s debt will be a key rating sensitivity factor.

 

Environment, social, and governance (ESG) profile

Vedanta has a dominant position in the metals and mining sector and has diversified its business risk profile with presence across multiple commodities such as zinc, aluminium, oil and gas, and iron ore. However, for the ESG assessment, CRISIL Ratings has evaluated Vedanta’s top-three business segments (zinc, aluminium and oil and gas) which, on a combined basis, contribute more than 85% to the consolidated operating profit.

 

The ESG profile supports the already strong credit risk profile of Vedanta. The metal and mining sector has a significant impact on the environment owing to high greenhouse gas (GHG) emissions, waste generation and water consumption. This is because of the energy-intensive manufacturing process and its high dependence on natural resources such as coal. The sector also has a significant social impact because of its large workforce across its operations and value chain partners, and also as its operations affect the local community and involve health hazards.

 

Key ESG highlights

  • Vedanta aims to become carbon neutral by 2050 or sooner—it envisages 20% reduction in GHG emissions intensity by 2025 from the 2012 baseline, and 25% reduction in its absolute carbon emission intensity by 2030. During fiscal 2022, Vedanta reduced GHG emissions to 62.83 million TCo2e.
  • The company has been improving its water recycling rate and recycled 30.6% of total water consumed in fiscal 2022. It has set a target to achieve net water positivity by 2030. The company recycled 98% of its high-volume, low-toxicity waste in fiscal 2022 (94% in fiscal 2021), and targets zero net waste by 2025.
  • The loss time injury frequency rate for the zinc business was 0.79 in fiscal 2022 against 0.97 in the previous fiscal for the permanent employees of the business. It was 0.41 for the aluminium business, 0.85 for the iron ore business and 0.80 for the steel business for fiscal 2022. It was observed that the company had more fatalities in the past year as compared to earlier. However, the company targets zero harm and fatalities going forward.
  • Gender diversity is 11.54% and the company aims to increase the share of women employees to 20% by 2030.
  • The governance structure is characterised by 50% of the board comprising independent directors (none with tenure exceeding 10 years), split in chairman and CEO positions, dedicated investor grievance redressal mechanism and healthy disclosures
  • Few regulatory issues, mainly related to environmental concerns, have led to suspension of some businesses (copper business in Tamil Nadu and iron ore mining in Goa due to state-wide ban on mining in Goa) in the past few years. These events have also had social impact due to job losses. These matters are sub-judice.

 

There is growing importance of ESG among investors and lenders. The commitment of Vedanta to ESG principles will play a key role in enhancing stakeholder confidence, given its high share of market borrowing in its overall debt and access to both domestic and foreign capital markets (mainly by VRL).

Outlook Negative

Vedanta’s profitability, leverage and financial flexibility could be materially impacted by slower-than-expected improvement in operational cost efficiencies, subdued volume growth in operational entities along with delayed/lower-than-expected refinancing by VRL.

Rating Sensitivity factors

Upward factors

Rating outlook can be revised to ‘Stable’ in case of:

  • Significant increase in Ebitda owing to ramp-up in volume and continued cost efficiency across businesses, and improving business resilience
  • Structural and sustained improvement in aluminium profitability, with Ebitda per tonne significantly higher than the levels of fiscal 2023 on sustained basis
  • Sustained deleveraging with material reduction in consolidated net debt, resulting in sustenance of net debt to Ebitda ratio below 2.5-2.7 times

 

Downward factors

Rating can be downgraded in case of:

  • Lower-than-expected Ebitda because of high cost of production, slower volume ramp-up or lower realisation
  • Delay in meaningful correction in financial leverage with net debt to Ebitda ratio sustaining above 2.5-2.7 times
  • Delayed or lower-than-expected refinancing by VRL for upcoming maturities resulting in higher-than-expected dividend payout by Vedanta, further impacting liquidity profile of the company
  • Sustained negative free cash flow (post capex) or any incremental investment or support to VRL or Volcan Investments Ltd
  • Financial stress at VRL, leading to reduced financial flexibility at Vedanta

About the Company

VRL holds 69.7% stake in Vedanta and has diversified operations across metals, mining, power, and oil and gas segments.

 

Capacities

Location

2.3 MTPA aluminium smelters in VDL and Balco

Jharsuguda, Odisha

2.0 MTPA alumina refinery

Lanjigarh, Odisha

1,980 megawatt independent power plant

Talwandi Sabo, Punjab

1.2 MTPA zinc/silver mines and 0.9 MTPA zinc smelters

5.6 MTPA zinc mines and 290 kilo tonne zinc smelters

Rajasthan

South Africa, Namibia

1,194 million barrels of oil equivalent oil and gas reserves

Rajasthan, Gujarat, Maharashtra, Andhra Pradesh, Assam, Tamil Nadu and Tripura

1.5 MTPA long steel rolling in Electrosteel Steel (held 95.5%)

Bokaro, Jharkhand

Key Financial Indicators

Particulars

Unit

2022

2021

Operating income

Rs crore

131,192

89,135

Profit after tax (PAT)

Rs crore

23,709

15,032

PAT margin

%

18.1

16.9

Adjusted debt/adjusted net-worth

Times

1.59

1.54

Interest coverage

Times

9.45

5.73

Note: These reflect CRISIL Ratings-adjusted consolidated financials

Any other information: Not applicable

Note on complexity levels of the rated instrument:
CRISIL Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

CRISIL Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the CRISIL Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name of instrument Date of allotment Coupon rate (%) Maturity date Issue size (Rs crore) Complexity level Rating assigned with outlook
INE205A07196 Debentures 25-Feb-20 9.20% 25-Feb-30 2000 Simple CRISIL AA/Negative
INE205A07212 Debentures 31-Dec-21 7.68% 31-Dec-24 1000 Simple CRISIL AA/Negative
INE205A07220 Debentures 29-Jun-22 8.74% 29-Jun-32 4089 Simple CRISIL AA/Negative
INE205A08012 Debentures 16-Dec-22 3M T bill 15-Mar-24 800 Simple CRISIL AA/Negative
NA Debentures% NA NA NA 1555 Simple CRISIL AA/Negative
NA Commercial paper NA NA 7-365 days 10000 Simple CRISIL A1+
NA Fund-based facilities^ NA NA NA 5,400 NA CRISIL AA/Negative
NA Fund-based facilities NA NA NA 540 NA CRISIL AA/Negative
NA Non-fund-based limit# NA NA NA 22,835 NA CRISIL A1+
NA Non-fund-based limit NA NA NA 820 NA CRISIL A1+
NA Non-fund-based limit* NA NA NA 500 NA CRISIL AA/Negative
NA Term loan 30-Sep-18 NA 30-Dec-28 360 NA CRISIL AA/Negative
NA Term loan 25-Jul-14 NA 30-Sep-25 781 NA CRISIL AA/Negative
NA Term loan 27-Jul-18 NA 30-Sep-24 143.5 NA CRISIL AA/Negative
NA Term loan 14-Aug-18 NA 14-Nov-23 300 NA CRISIL AA/Negative
NA Term loan 31-Oct-20 NA 31-Jan-25 72 NA CRISIL AA/Negative
NA Term loan 03-Aug-18 NA 31-Mar-28 2,438 NA CRISIL AA/Negative
NA Term loan 26-Aug-21 NA 30-Sep-26 1,610 NA CRISIL AA/Negative
NA Term loan 30-Aug-21 NA 30-Sep-26 425 NA CRISIL AA/Negative
NA Term loan 15-Sep-21 NA 30-Sep-26 425 NA CRISIL AA/Negative
NA Term loan 28-Sep-21 NA 30-Sep-26 1,001 NA CRISIL AA/Negative
NA Term loan 28-Dec-21 NA 30-Sep-27 7,239 NA CRISIL AA/Negative
NA Term loan 31-Mar-22 NA 31-Mar-25 251 NA CRISIL AA/Negative
NA Term loan 12-Mar-20 NA 30-Jun-25 436 NA CRISIL AA/Negative
NA Term loan 14-Dec-21 NA 30-Sep-26 70 NA CRISIL AA/Negative
NA Term loan 31-Dec-21 NA 30-Sep-27 950 NA CRISIL AA/Negative
NA Term loan 31-Mar-22 NA 31-Mar-28 1,000 NA CRISIL AA/Negative
NA Term loan 30-Nov-19 NA 31-Mar-25 350 NA CRISIL AA/Negative
NA Term loan 29-Apr-22 NA 31-Dec-26 463 NA CRISIL AA/Negative
NA Term loan 30-Jun-22 NA 31-Mar-27 1,196 NA CRISIL AA/Negative
NA Term loan 18-Jul-22 NA 30-Jun-27 935 NA CRISIL AA/Negative
NA Term loan 26-Sep-22 NA 31-Mar-24 1,000 NA CRISIL AA/Negative
NA Term loan 24-Nov-22 NA 30-Nov-24 225 NA CRISIL AA/Negative
NA Term loan 28-Nov-22 NA 30-Nov-27 475 NA CRISIL AA/Negative
NA Term loan 08-Dec-22 NA 31-Dec-29 746 NA CRISIL AA/Negative
NA Term loan 15-Feb-23 NA 31-Dec-27 500 NA CRISIL AA/Negative
NA Term loan 30-Jan-23 NA 27-Feb-28 1250 NA CRISIL AA/Negative
NA Term loan NA NA 30-Sep-26 40 NA CRISIL AA/Negative
NA Term loan NA NA 30-Sep-26 198 NA CRISIL AA/Negative
NA Term loan NA NA 30-Sep-26 132 NA CRISIL AA/Negative
NA Term loan NA NA 30-Sep-26 220 NA CRISIL AA/Negative
NA Term loan 24-Mar-23 NA 23-Mar-28 250 NA CRISIL AA/Negative
NA Term loan NA NA 31-Dec-26 460 NA CRISIL AA/Negative
NA Term loan NA NA 31-Dec-26 184 NA CRISIL AA/Negative
NA Term loan NA NA 31-Dec-26 43 NA CRISIL AA/Negative

^ Fund-based limit is completely interchangeable with non-fund-based limit

#Non-fund-based limit of Rs 2000 crore is interchangeable with fund-based limit

*Capex letter of credit limit is interchangeable with operational non-fund-based limit

% Yet to be placed

Annexure – List of entities consolidated

Name of entity 

Type of consolidation

Rationale for consolidation

Hindustan Zinc Ltd

Full consolidation

Significant financial and operational linkages

Bharat Aluminium Company Ltd

Full consolidation

Significant financial and operational linkages

MALCO Energy Ltd

Full consolidation

Significant financial and operational linkages

Talwandi Sabo Power Ltd

Full consolidation

Significant financial and operational linkages

Sesa Resources Ltd

Full consolidation

Significant financial and operational linkages

Sesa Mining Corporation Ltd

Full consolidation

Significant financial and operational linkages

Sterlite Ports Ltd

Full consolidation

Significant financial and operational linkages

Maritime Ventures Pvt Ltd

Full consolidation

Significant financial and operational linkages

Goa Sea Port Pvt Ltd

Full consolidation

Significant financial and operational linkages

Vizag General Cargo Berth Pvt Ltd

Full consolidation

Significant financial and operational linkages

Paradip Multi Cargo Berth Pvt Ltd

Full consolidation

Significant financial and operational linkages

Copper Mines of Tasmania Pty Ltd

Full consolidation

Significant financial and operational linkages

Thalanga Copper Mines Pty Ltd

Full consolidation

Significant financial and operational linkages

Monte Cello B V

Full consolidation

Significant financial and operational linkages

Bloom Fountain Ltd

Full consolidation

Significant financial and operational linkages

Twinstar Energy Holding Ltd

Full consolidation

Significant financial and operational linkages

Twinstar Mauritius Holding Ltd

Full consolidation

Significant financial and operational linkages

Western Clusters Ltd

Full consolidation

Significant financial and operational linkages

Sterlite (USA) Inc

Full consolidation

Significant financial and operational linkages

Fujairah Gold FZC

Full consolidation

Significant financial and operational linkages

THL Zinc Ventures Ltd

Full consolidation

Significant financial and operational linkages

THL Zinc Ltd

Full consolidation

Significant financial and operational linkages

THL Zinc Holding B V

Full consolidation

Significant financial and operational linkages

THL Zinc Namibia Holdings (Proprietary) Ltd

Full consolidation

Significant financial and operational linkages

Skorpion Zinc (Proprietary) Ltd

Full consolidation

Significant financial and operational linkages

Skorpion Mining Company (Proprietary) Ltd

Full consolidation

Significant financial and operational linkages

Namzinc (Proprietary) Ltd

Full consolidation

Significant financial and operational linkages

Amica Guesthouse (Proprietary) Ltd

Full consolidation

Significant financial and operational linkages

Rosh Pinah Healthcare (Proprietary) Ltd

Full consolidation

Significant financial and operational linkages

Black Mountain Mining (Proprietary) Ltd

Full consolidation

Significant financial and operational linkages

Vedanta Lisheen Holdings Ltd

Full consolidation

Significant financial and operational linkages

Vedanta Lisheen Mining Ltd

Full consolidation

Significant financial and operational linkages

Killoran Lisheen Mining Ltd

Full consolidation

Significant financial and operational linkages

Killoran Lisheen Finance Ltd

Full consolidation

Significant financial and operational linkages

Lisheen Milling Ltd

Full consolidation

Significant financial and operational linkages

Vedanta Exploration Ireland Ltd

Full consolidation

Significant financial and operational linkages

Lisheen Mine Partnership

Full consolidation

Significant financial and operational linkages

Lakomasko BV

Full consolidation

Significant financial and operational linkages

Cairn India Holdings Ltd

Full consolidation

Significant financial and operational linkages

Cairn Energy Hydrocarbons Ltd

Full consolidation

Significant financial and operational linkages

Cairn Exploration (No. 2) Ltd

Full consolidation

Significant financial and operational linkages

Cairn Energy Gujarat Block 1 Ltd

Full consolidation

Significant financial and operational linkages

Cairn Energy Discovery Ltd

Full consolidation

Significant financial and operational linkages

Cairn Energy India Pty Ltd

Full consolidation

Significant financial and operational linkages

CIG Mauritius Holdings Pvt Ltd

Full consolidation

Significant financial and operational linkages

CIG Mauritius Pvt Ltd

Full consolidation

Significant financial and operational linkages

Cairn Lanka (Pvt) Ltd

Full consolidation

Significant financial and operational linkages

Cairn South Africa Proprietary Ltd

Full consolidation

Significant financial and operational linkages

Avanstrate (Japan) Inc (ASI)

Full consolidation

Significant financial and operational linkages

Avanstrate (Korea) Inc

Full consolidation

Significant financial and operational linkages

Avanstrate (Taiwan) Inc

Full consolidation

Significant financial and operational linkages

Sesa Sterlite Mauritius Holdings Ltd

Full consolidation

Significant financial and operational linkages

Vedanta Star Ltd

Full consolidation

Significant financial and operational linkages

RoshSkor Township (Pty) Ltd

Equity method

Proportionate consolidation

Gaurav Overseas Pvt Ltd

Equity method

Proportionate consolidation

Rampia Coal Mines and Energy Pvt Ltd

Equity method

Proportionate consolidation

Madanpur South Coal Company Ltd

Equity method

Proportionate consolidation

Goa Maritime Pvt Ltd

Equity method

Proportionate consolidation

Annexure - Rating History for last 3 Years
  Current 2023 (History) 2022  2021  2020  Start of 2020
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 32108.5 CRISIL AA/Negative 28-03-23 CRISIL AA/Negative 30-12-22 CRISIL AA/Stable 25-11-21 CRISIL AA-/Positive 28-10-20 CRISIL A1+ / CRISIL AA-/Stable CRISIL AA/Stable
      --   -- 30-09-22 CRISIL AA/Stable 27-10-21 CRISIL AA-/Positive 17-06-20 CRISIL AA/Negative / CRISIL A1+ --
      --   -- 12-08-22 CRISIL AA/Stable 03-05-21 CRISIL AA-/Stable 28-05-20 CRISIL AA/Negative / CRISIL A1+ --
      --   -- 29-07-22 CRISIL AA/Stable 08-02-21 CRISIL A1+ / CRISIL AA-/Stable 03-04-20 CRISIL AA/Negative --
      --   -- 06-05-22 CRISIL AA/Stable   -- 10-01-20 CRISIL AA/Stable --
      --   -- 18-04-22 CRISIL AA/Stable   --   -- --
      --   -- 25-02-22 CRISIL AA/Stable   --   -- --
      --   -- 25-01-22 CRISIL AA-/Positive   --   -- --
Non-Fund Based Facilities ST/LT 24155.0 CRISIL AA/Negative / CRISIL A1+ 28-03-23 CRISIL AA/Negative / CRISIL A1+ 30-12-22 CRISIL A1+ / CRISIL AA/Stable 25-11-21 CRISIL AA-/Positive / CRISIL A1+ 28-10-20 CRISIL A1+ / CRISIL AA-/Stable CRISIL A1+
      --   -- 30-09-22 CRISIL A1+ / CRISIL AA/Stable 27-10-21 CRISIL AA-/Positive / CRISIL A1+ 17-06-20 CRISIL AA/Negative / CRISIL A1+ --
      --   -- 12-08-22 CRISIL A1+ / CRISIL AA/Stable 03-05-21 CRISIL A1+ / CRISIL AA-/Stable 28-05-20 CRISIL AA/Negative / CRISIL A1+ --
      --   -- 29-07-22 CRISIL A1+ / CRISIL AA/Stable 08-02-21 CRISIL A1+ / CRISIL AA-/Stable 03-04-20 CRISIL AA/Negative / CRISIL A1+ --
      --   -- 06-05-22 CRISIL A1+ / CRISIL AA/Stable   -- 10-01-20 CRISIL A1+ / CRISIL AA/Stable --
      --   -- 18-04-22 CRISIL A1+ / CRISIL AA/Stable   --   -- --
      --   -- 25-02-22 CRISIL A1+ / CRISIL AA/Stable   --   -- --
      --   -- 25-01-22 CRISIL AA-/Positive / CRISIL A1+   --   -- --
Commercial Paper ST 10000.0 CRISIL A1+ 28-03-23 CRISIL A1+ 30-12-22 CRISIL A1+ 25-11-21 CRISIL A1+ 28-10-20 CRISIL A1+ CRISIL A1+
      --   -- 30-09-22 CRISIL A1+ 27-10-21 CRISIL A1+ 17-06-20 CRISIL A1+ --
      --   -- 12-08-22 CRISIL A1+ 03-05-21 CRISIL A1+ 28-05-20 CRISIL A1+ --
      --   -- 29-07-22 CRISIL A1+ 08-02-21 CRISIL A1+ 03-04-20 CRISIL A1+ --
      --   -- 06-05-22 CRISIL A1+   -- 10-01-20 CRISIL A1+ --
      --   -- 18-04-22 CRISIL A1+   --   -- --
      --   -- 25-02-22 CRISIL A1+   --   -- --
      --   -- 25-01-22 CRISIL A1+   --   -- --
Non Convertible Debentures LT 9444.0 CRISIL AA/Negative 28-03-23 CRISIL AA/Negative 30-12-22 CRISIL AA/Stable 25-11-21 CRISIL AA-/Positive 28-10-20 CRISIL AA-/Stable CRISIL AA/Stable
      --   -- 30-09-22 CRISIL AA/Stable 27-10-21 CRISIL AA-/Positive 17-06-20 CRISIL AA/Negative --
      --   -- 12-08-22 CRISIL AA/Stable 03-05-21 CRISIL AA-/Stable 28-05-20 CRISIL AA/Negative --
      --   -- 29-07-22 CRISIL AA/Stable 08-02-21 CRISIL AA-/Stable 03-04-20 CRISIL AA/Negative --
      --   -- 06-05-22 CRISIL AA/Stable   -- 10-01-20 CRISIL AA/Stable --
      --   -- 18-04-22 CRISIL AA/Stable   --   -- --
      --   -- 25-02-22 CRISIL AA/Stable   --   -- --
      --   -- 25-01-22 CRISIL AA-/Positive   --   -- --
Preference Shares LT   --   --   --   --   -- Withdrawn
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Fund-Based Facilities& 400 Axis Bank Limited CRISIL AA/Negative
Fund-Based Facilities& 150 IDBI Bank Limited CRISIL AA/Negative
Fund-Based Facilities& 250 Emirates NBD Bank PJSC CRISIL AA/Negative
Fund-Based Facilities 200 Kotak Mahindra Bank Limited CRISIL AA/Negative
Fund-Based Facilities 340 Barclays Bank Plc. CRISIL AA/Negative
Fund-Based Facilities& 5 Standard Chartered Bank Limited CRISIL AA/Negative
Fund-Based Facilities& 600 ICICI Bank Limited CRISIL AA/Negative
Fund-Based Facilities& 95 HDFC Bank Limited CRISIL AA/Negative
Fund-Based Facilities& 600 Deutsche Bank CRISIL AA/Negative
Fund-Based Facilities& 1000 Bank of Baroda CRISIL AA/Negative
Fund-Based Facilities& 200 YES Bank Limited CRISIL AA/Negative
Fund-Based Facilities& 1000 Bank of Baroda CRISIL AA/Negative
Fund-Based Facilities& 100 IndusInd Bank Limited CRISIL AA/Negative
Fund-Based Facilities& 1000 State Bank of India CRISIL AA/Negative
Non-Fund Based Limit% 500 YES Bank Limited CRISIL A1+
Non-Fund Based Limit% 6676 State Bank of India CRISIL A1+
Non-Fund Based Limit% 1150 IDBI Bank Limited CRISIL A1+
Non-Fund Based Limit 820 MUFG Bank Limited CRISIL A1+
Non-Fund Based Limit% 824 State Bank of India CRISIL A1+
Non-Fund Based Limit% 475 IDFC FIRST Bank Limited CRISIL A1+
Non-Fund Based Limit% 730 YES Bank Limited CRISIL A1+
Non-Fund Based Limit% 4280 ICICI Bank Limited CRISIL A1+
Non-Fund Based Limit% 6750 HDFC Bank Limited CRISIL A1+
Non-Fund Based Limit% 350 DBS Bank Limited CRISIL A1+
Non-Fund Based Limit% 300 IndusInd Bank Limited CRISIL A1+
Non-Fund Based Limit% 800 Axis Bank Limited CRISIL A1+
Non-Fund Based Limit$ 500 IndusInd Bank Limited CRISIL AA/Negative
Term Loan 1196 Bank of Baroda CRISIL AA/Negative
Term Loan 746 Bank of Maharashtra CRISIL AA/Negative
Term Loan 475 YES Bank Limited CRISIL AA/Negative
Term Loan 781 State Bank of India CRISIL AA/Negative
Term Loan 1950 Indian Bank CRISIL AA/Negative
Term Loan 72 United Bank Limited CRISIL AA/Negative
Term Loan 1250 Indian Bank CRISIL AA/Negative
Term Loan 360 ICICI Bank Limited CRISIL AA/Negative
Term Loan 850 Canara Bank CRISIL AA/Negative
Term Loan 460 Bank of Maharashtra CRISIL AA/Negative
Term Loan 184 Bajaj Finance Limited CRISIL AA/Negative
Term Loan 43 CSB Bank Limited CRISIL AA/Negative
Term Loan 250 IDBI Bank Limited CRISIL AA/Negative
Term Loan 220 UCO Bank CRISIL AA/Negative
Term Loan 132 Bandhan Bank Limited CRISIL AA/Negative
Term Loan 60 IDFC FIRST Bank Limited CRISIL AA/Negative
Term Loan 436 Indian Overseas Bank CRISIL AA/Negative
Term Loan 40 The Karur Vysya Bank Limited CRISIL AA/Negative
Term Loan 138 IDFC FIRST Bank Limited CRISIL AA/Negative
Term Loan 7490 Union Bank of India CRISIL AA/Negative
Term Loan 4048 Bank of Baroda CRISIL AA/Negative
Term Loan 143.5 Kotak Mahindra Bank Limited CRISIL AA/Negative
Term Loan 350 Citibank N. A. CRISIL AA/Negative
Term Loan 525 IndusInd Bank Limited CRISIL AA/Negative
Term Loan 1001 Punjab National Bank CRISIL AA/Negative
Term Loan 463 Axis Bank Limited CRISIL AA/Negative
Term Loan 1000 Axis Bank Limited CRISIL AA/Negative
Term Loan 935 Canara Bank CRISIL AA/Negative
Term Loan 70 Axis Bank Limited CRISIL AA/Negative
Term Loan 500 Axis Bank Limited CRISIL AA/Negative
This Annexure has been updated on 26-Apr-23 in line with the lender-wise facility details as on 29-Jul-22 received from the rated entity
& - Fund based Limits are completely interchangeable with Non Fund based Limits
% - Non-fund-based limit of Rs 2000 crore is interchangeable with fund-based limit
$ - Capex LC limit, interchangeable with operational Non Fund based Limits
Criteria Details
Links to related criteria
CRISILs Approach to Financial Ratios
Rating criteria for manufaturing and service sector companies
CRISILs Bank Loan Ratings - process, scale and default recognition
Rating Criteria for Mining Industry
CRISILs Criteria for rating short term debt
CRISILs Criteria for Consolidation

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