By Malvika Gurung

Investing.com — Rating agency CRISIL (NS:) has upgraded the mining company Vedanta’s (NS:) rating on the long-term bank facilities and debt instruments from ‘AA-’ to ‘AA’, along with revising its outlook from Positive to Stable.

The latest upgrade in rating and outlook demonstrate outstanding financial performance by the mining company, in addition to an improvement in corporate structure, decent capital allocation and balance sheet. 

An ‘AA’ rating indicates a very low credit risk by the instrument, meaning they have a high degree of safety regarding timely servicing of financial obligations, states a PTI report.

Besides, CRISIL has held its short-term rating on bank facilities and commercial paper to ‘CRISIL A1+’.

The ratings agency’s upgrade considers Vedanta’s higher-than-expected operating profitability, due to escalated commodity prices in FY22, the company’s volume growth across businesses, and underlying cost efficiency.

The agency expects EBITDA to be higher than expected, exceeding Rs 44,000 crore in the ongoing FY, and over Rs 40,000 crore in FY23, leading to improved free cash flow and return on capital employed over the medium term, quoted the report.

Shares of Vedanta ended 7.26% higher at Rs 362.6 apiece on Friday.

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