CRISIL has assigned its 'AA+/Stable' rating to the Rs 15 billion non-convertible debentures (NCDs) of Sesa Sterlite. CRISIL has also reaffirmed its ratings on the company's existing NCDs, short-term debt, and bank facilities at 'AA+/Stable/A1+'.

The ratings continue to reflect Sesa Sterlite's diversified business risk profile; its cost leadership in zinc, and the oil and gas segments; and its healthy financial risk profile. These rating strengths are partially offset by the company's susceptibility to volatility in commodity prices, to regulatory risks in the iron ore business, and to project execution risks associated with sizeable capital expenditure (capex) programmes in its aluminium and power projects.

CRISIL believes Sesa Sterlite will continue to generate robust cash accruals from its zinc, copper, and energy operations (oil and gas, and power businesses) over the medium term. Furthermore, the company will be able to access liquidity in HZL and Cairn India over the medium term.

The outlook may be revised to 'Positive' if Sesa Sterlite improves its aluminium cost profile substantially, or completes its projects sooner than expected. Conversely, the outlook may be revised to 'Negative' if the iron ore mining ban continues longer than expected, or the company undertakes fresh large debt-funded capex or acquisition programmes, or if it is adversely impacted by a steep decline in metal prices.

Shares of the company gained Rs 0.2, or 0.08%, to trade at Rs 249. The total volume of shares traded was 220,957 at the BSE (3.26 p.m., Monday).