NEW DELHI, July 27:
CRISIL Ratings has reaffirmed ESL Steel Ltd’s long-term credit rating at CRISIL AA/Stable and removed it from “Rating Watch with Developing Implications”, signalling confidence in the company’s business outlook as the Vedanta Group completes its demerger and strengthens its steel business.
The ratings agency said ESL Steel is an integral part of Vedanta Iron and Steel’s long-term strategy and expects the company to emerge as the largest contributor to the parent company’s earnings in the medium term. The assessment is backed by continued operational, managerial, and financial support from Vedanta Iron & Steel Ltd, including unconditional and irrevocable corporate guarantees for ESL’s long-term debt.
According to CRISIL, the reaffirmation follows a comprehensive review of the Vedanta Group after the successful completion of its demerger. The agency also upgraded ratings for other Vedanta Group entities, including Vedanta Ltd, Vedanta Aluminium, Vedanta Oil & Gas, and the guaranteed facilities of Vedanta Power.
The rating action comes as ESL Steel’s operational performance improved significantly in the fourth quarter of FY26. The company reported a sharp increase in liquidity, with cash and cash equivalents rising to Rs 464 crore, nearly 90 per cent higher than Rs 245 crore a year earlier. CRISIL said management expects the improved operating performance to continue even as the company expands its operations.
CRISIL also highlighted the improving financial profile of the Vedanta Group following the demerger. It noted that the group’s net debt-to-EBITDA ratio improved to 2 times in FY26, compared with 2.55 times in the previous fiscal year, and is expected to strengthen further. The agency said Vedanta’s diversified metals portfolio, scale of operations, and cost-efficient business model continue to support its overall credit profile.
The reaffirmation is expected to support Vedanta’s plans to expand its steel business, with ESL Steel playing a central role in the group’s long-term growth strategy.
(UNI)