Vedanta Ltd shares fell by nearly 9% on February 28 in expectation of its $2 billion fundraising scheduled in the coming weeks.

Shares lost over 8.82%, the biggest drop since September 16, 2022, to hit more than a five-month low of Rs 262 on Tuesday. In the last eight trading sessions, the stock fell 15%. The stock has plunged over 13% so far this year.

S&P Global Ratings specified in a report that if Vedanta Resources, controlled by mining billionaire Anil Agarwal, cannot advance either the $2 billion fundraising exercise or its international zinc assets sold to Hindustan Zinc Ltd in the future, the company’s credit rating will face the instant strain.

According to reports, the government has unfavoured Vedanta Resources’ plan to trade its global zinc assets to HZL, its Indian minor, for nearly $3 billion. The government raised concerns, counting the assets valuation, as it owns a 29.54% stake in HZL, privatised over 20 years ago.

After Vedanta Ltd professed a dividend in January, S&P stated that Vedanta Resources is entirely funded until March 2023, having debt maturities of only $15 million between July and September, which will need to educate a minimum of about $500 million to meet its requirements until June.

During this period, Vedanta Resources must reimburse $300 million of inter-company credits and $350 million to two relationship banks. Without important fundraising, the company will have around $500 million after the repayments.

External funding is, therefore, crucial for debt maturities after September. This includes a $500 million loan repayment due in the quarter ending December 31, 2023, and a $1 billion bond due in January 2024.

Vedanta Ltd’s net debt increased by Rs 6,000 crore by the end of Q3FY23 due to the company’s ongoing capex and dividend payments. However, Vedanta Ltd reduced its debt at holding company Vedanta Resources Limited (VRL) by $1.7 billion in the first nine months of FY23, in line with its pledge to reduce debt by $4 billion over three years.