Rating agency India Ratings has affirmed Reliance Industries ltd.’s (RIl) long-Term Issuer Rating and the ratings on its Rs 12.7 billion non-convertible debentures (NCDs) at ‘IND AAA’. The agency has also affirmed RIl’s Rs 50 billion commercial paper at ‘IND A1+’.
“Ratings reflect RIl’s strong and diversified presence in the Indian oil & gas sector with vertically integrated and cost-efficient operations across the refining and petrochemical verticals, said the report.
RIl has a leading market position in the Indian petroleum refining and petrochemical industry. The company’s exploration and production segment has a stake in three operating oil blocks in India as well as in active shale gas assets in the US. In 1HFY17, RIl commenced its telecommunication operations, offering data and voice services over 4G-lTE (long-term evolution) technology on a pan-India level.
Telecommunication business Potential: RIl has started its telecom business under the brand Reliance Jio (Rio). It has a large spectrum footprint of 1,108MHz (uplink + downlink) across 800MHz, 1,800MHz and 2,300MHz with an average life of 16 years. It has also entered into agreements with telecom infrastructure and telecom services companies to access their infrastructure.
“The division may not meaningfully contribute to consolidated operating profits during the ramp-up phase as it operates in a highly competitive environment. However, the agency expects the division to turn profitable by FY19, given the high growth potential, low-cost data tariffs and a bouquet of digital offerings,” added the report.