Vedanta continues to see twist in tales. While the rebound in base metal and oil prices continue to drive the company’s prospects, Moody’s recent rating downgrades for its parent –Vedanta Resources Ltd (VRL) — may mellow down strong investor sentiment.
Vedanta shares have continued to gain and rise almost 39% in the last one month.
The global credit ratings agency downgraded VRL’s rating to speculative grade, highlighting its financial stress and bringing the spotlight back on its need for further support. Vedanta, through its overseas subsidiary, had recently advanced inter-corporate loans of $956 million to VRL in three tranches during April-October, repayable over the next three years. Though Vedanta had assured it won’t extending further financial assistance to its parent, analysts were still cautious and cut their target prices.
