Vedanta's Strategic Shift: Reduced Debt and Optimistic Forecasts

Bank of America Global Research has given a favorable recommendation for Vedanta's securities. a reduced liquidity risk at the holding company, competitive debt rates, and decreased reliance on dividends are key factors. A US-based short seller raised allegations, which Vedanta denied. Future debt servicing needs and dividend demands are expected to decrease.

Bank of America (BofA) Global Research has issued a positive recommendation on Vedanta's securities. The endorsement comes in light of reduced liquidity risk, more competitive debt pricing, and decreased dependency on dividends for their portfolio.

Despite facing allegations from a US-based short seller, which Vedanta Group has robustly denied, BofA argues that Vedanta Resources Ltd benefits from structural subordination and a refined approach to managing dividends and senior management changes, as highlighted by a third-party Viceroy report.

Vedanta Resources aims to lower its debt to $5.3 billion by the end of FY 2025, with BofA projecting further reductions in debt servicing needs to $1.1 billion by FY 2026, down from $1.8 billion in FY 2025.

(With inputs from agencies.)