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Bank of America (BofA) Global Research maintained a positive outlook on securities issued by Vedanta Resources Ltd (VRL) and its subsidiary Vedanta Ltd (VEDL), despite recent allegations by short seller firm Viceroy Research. Viceroy Research alleged that VRL was forced to refund INR 10.3bn ($123mn) to VEDL after regulatory scrutiny by the Enforcement Directorate (ED) in 2023. The refunded amount, labeled as “brand fee rebate”, was not disclosed to bondholders or the market, they claimed. These brand fees lacked commercial rationale, with $361mn paid in FY2025 alone to help service VRL’s debt and interest burden, Viceroy stated. Vedanta has strongly denied the allegations, calling them malicious and baseless. BofA also supported the legality and rationale of the brand fees, noting they comply with Indian regulations.
BofA’s positive outlook comes on the back of citing improvements such as reduced holding company liquidity risk, cheaper debt, and less reliance on dividends going forward. Key points from BofA’s report include:
BofA finds the yield curve of Vedanta’s securities attractive as compared to regional and emerging market peers. Vedanta’s dollar bonds were trading stable with its 11.25% 2031s at 104.35, yielding 10.29%.
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