S&P Global Ratings on Thursday said liquidity stress has reduced for Vedanta Resources Ltd as the company has addressed a large part of its debt maturities for the ongoing financial year.
The rating agency also said that while Vedanta Resources still has some funds to raise, it has sufficient cash at its cash-rich India operating subsidiary Vedanta Ltd and will gain from established banking relationships.
"That said, Vedanta Resources' weakened access to capital markets and persistent refinancing needs constrain the rating," S&P Global Ratings said in a statement.
From the requirement to refinance about $3 billion at the start of the current fiscal year, Vedanta Resources' debt maturities for the rest of the fiscal are now about $1.3 billion.
"We assume the company will meet about half of the remaining amount due in fiscal 2023 further dividends from Vedanta Ltd, and the rest will be refinanced," it added.
Even if Vedanta Resources is not able to raise funding for the 2023 bonds, the rating agency said it should be still able to meet the bond repayments through dividends from its subsidiary Vedanta Ltd.
"Our assessment of Vedanta Resources' liquidity takes into account the impact on the company's earnings from a fall in commodity prices in recent months and the Indian government's imposition of a windfall tax on oil," it said.
A large dividend from its cash-rich India operating subsidiary has boosted billionaire Anil Agarwal-led Vedanta Resources Ltd's efforts to refinance debt, Moody's Investors Service had earlier said.
Vedanta Resources Ltd owns a 69.7 per cent stake in Vedanta Ltd.