Moody's has affirmed VRL's B2 corporate family rating (CFR) and the B3 rating on the senior unsecured notes issued by VRL and those issued by its wholly-owned subsidiary Vedanta Resources Finance II Plc, and guaranteed by VRL.

"The change in outlook to negative reflects holding company VRL's large near-term refinancing requirements amid tightening liquidity in the capital markets," says Kaustubh Chaubal, a Moody's Vice President and Senior Credit Officer. "The continued delay in refinancing its upcoming debt maturities with long-term funding raises concerns over the company's liquidity management, even as supportive commodity prices have improved its key financial metrics."

Moody's considers the holdco's persistently weak liquidity and high refinancing needs as signs of an aggressive risk appetite, with implications for the company's financial strategy and risk management, a key component of the rating agency's governance risk assessment framework. Today's rating action considers the impact of VRL's aggressive liquidity management and refinancing practices on its credit profile, which Moody's regards as credit negative.

The affirmation of the CFR reflects the rating agency's view that VRL's operations are solidly positioned with favorable underlying demand and commodity prices that support continued positive free cash flow generation.

Vedanta Group is a global diversified group of companies with presence in metals, mining, oil & gas, power, telecom and glass. Vedanta Group has presence in electronics and technology business through group companies, Avanstrate Inc. and Sterlite Technologies.

On a consolidated basis, the diversified natural resources firm's net profit rose 26% to Rs 4,164 crore on 50% increase in net s