Vedanta Resources said on Wednesday it had brought down debt significantly, seeking to allay market concerns after S&P Global Ratings last week raised doubts about its ability to meet financial obligations beyond September. The billionaire Anil Agarwal-owned company — parent of Indian resources giant Vedanta Ltd — said it had cut net debt by $2 billion in the last 11 months, ahead of its own three-year target.

It has, therefore, attained half of its $4 billion deleveraging target in the first year. S&P Global Ratings said on February 8 that while the company was likely to meet its obligations until September, liquidity beyond that would depend on critical fund-raising and the proposed sale of international zinc assets by Vedanta Ltd to Hindustan Zinc.

Vedanta Resources said on Wednesday it has healthy cash flow boosted by robust domestic consumption and that growth would be propelled by its associate firms’ investments into semiconductors, display glass, renewables, optical fibre and transmission.

It had a net debt of $9.66 billion as of March 31, 2022, according to an investor presentation on its website. After repayments and borrowings, it has about $7.7 billion outstanding, of which $3 billion is due for repayment in the next fiscal year. Vedanta Resources said that powered by robust domestic consumption in the fastest-growing major economy, it is delivering healthy cash flows while maintaining disciplined capital allocation. “During 2023-24 and 2024- 25, Vedanta will continue to deleverage from net debt of $7.7 billion and plans to cover 50 per cent of 2023-24 liquidity requirements internally and the balance through refinancing,” the company added.

Last week, S&P Global Ratings had said that the company’s credit ratings may “come under pressure” if it is unable to raise $2 billion and/or sell its international zinc assets. Vedanta Ltd, in which Vedanta Resources has a 70 per cent stake, has proposed the sale of the international zinc business to Hindustan Zinc Ltd for nearly $3 billion. However, reports say the central government is not keen on the deal and one of its main concern is the valuation. The Centre holds a 29.54 per cent stake in HZL.

S&P had last week stated that Vedanta Resources is fully funded until March 2023, following a dividend declared by Vedanta Ltd in January. Vedanta Resources’ statement also comes at a time Indian conglomerate Adani Group is still battling the fallout from a US short-seller’s critical report on its business practices that has wiped off $120 billion from its market value.

With inputs from Reuters