India News
Search Web Directory
News Home
Fitch Ratings raises Reliance's outlook to positive
Posted on 16th August 2019
New Delhi: Fitch Ratings on Friday raised the outlook on Reliance Industries Ltd (RIL) to positive from stable due to the company's potential to further deleverage following its announcement to eliminate its net debt by March 2021.

In a statement, Fitch said it is revising "the outlook on RIL's Long-Term Local-Currency issuer default rating (IDR) to Positive from Stable and has affirmed the rating at 'BBB'."

"At the same time, the agency has affirmed the Long-Term Foreign-Currency IDR at 'BBB-' with a Stable Outlook, as RIL's Foreign-Currency IDR is capped by India's (BBB-/Stable) Country Ceiling of 'BBB-'," the statement said.

The revision in the outlook follows RIL announcing plans to sell a 20 per cent stake in its oil-to-chemical division to Saudi Arabian Oil Company (Saudi Aramco).

This provides RIL potential to "further deleverage" after eliminating its net debt by the financial year 2020-21.

"We forecast its adjusted net debt/EBITDAR to reach 1.5x over the next 18 to 24 months," Fitch said.

The rating affirmation reflected RIL's strong business profile - a large-scale refinery with a capacity of around 1.2 million barrels a day and dominant market position in petrochemicals.

"The company has completed capex to increase its downstream integration, which has improved feedstock flexibility," the rating agency said adding it expects RIL's digital-services business, Jio, to continue its strong growth.

Jio has achieved a leading position in its wireless subscriber base, though it is still evolving, as reflected in the recent spinoff of its tower and fibre assets to investment trusts and plans to roll out a fiber-to-the-home business.

"RIL's financial profile is also likely to improve, supported by strong operating cash flow from its expanded petrochemical and refining business. Capex should moderate from FY'20, with free cash flow turning positive in FY'21," it added.

Fitch said RIL's capex is expected to fall following the completion of most planned projects in its various business segments.

The company's expansion of its fiber business is likely to be the major capex driver over the medium term, along with its investment in the domestic upstream business of around USD 5 billion in a joint venture with BP plc over the next two to three years.

Free cash flow (FCF) should turn positive by FY'21, driven by robust operating cash flow from its refining, petrochemical and digital-services business along with lower capex, it said.

"We expect the digital-services business to turn FCF positive in FY22, hence it will no longer be a drag on RIL's overall cash flow profile. This should see lower net debt and net leverage, as measured by net adjusted debt/EBITDAR, should improve to around 1.7x by FY21, from 2.5x in FY19, without factoring in the proposed investment from Saudi Aramco," it said.

RIL has entered a non-binding letter of intent with Saudi Aramco to sell a 20 per cent stake in its oil-to-chemical division based on a USD 75 billion enterprise value for the division. Earlier, RIL agreed to form a joint venture with BP where the British firm will invest Rs 7,200 crore for a 49 per cent stake in fuel retail network and aviation fuel business.

RIL has also entered into an agreement with Canada's Brookfield Infrastructure Partners L P for an investment of Rs 25,200 crore in Jio's Tower Infrastructure Trust (Reliance Jio Infratel Pvt Ltd).

"RIL's ratings are supported by its strong business profile and robust refining asset quality, which enables it to consistently deliver a GRM above regional benchmarks. The company also has a solid market position in petrochemicals, with robust vertical integration and flexibility in the feedstock. It has also attained a leading position in its telecom business, which we expect will help diversify its cash flow generation streams," Fitch said.

Related Companies: Reliance Industries Limited (RIL)   

Other Latest News
TVS launches sportier NTorq 125 Race Edition
Posted on 23rd September 2019
TVS has launched the sportier NTorq 125 Race Edition in India at Rs 62,995 (ex-showroom Delhi) just a couple of days after it was teased. The newly launched variant is dearer by Rs 3000 over the disc brake-equipped model. It gets a new full-LED headlamp - something long anticipated in the scooter since the beginning. It also gets hazard lamp function and new colour options with new graphics.

Bharat Gas gets five-year loan from Bank of Baroda for ₹3,100 crore
Posted on 23rd September 2019
Mumbai: Bharat Gas Resources Ltd (BGR) a wholly-owned subsidiary of Bharat Petroleum Corporation Ltd (BPCL), has signed a five-year loan agreement with Bank of Baroda for ₹3100 crore, according to two officials aware of the deal.

The company will use the loan to fund expansion of its city gas distribution business. BGRL has a board approved borrowing limit of ₹4000 crore.

ITC shares up 9% as no cess on cigarettes was increased
Posted on 23rd September 2019
Mumbai: Shares of ITC Ltd on Monday surged over 9%, its biggest jump since March 2016, after the GST Council meeting did not announce any increase in cess on cigarettes.

The stock touched a high of ₹260.30 on the BSE and gained as much as 9.3%, its maximum gain since March 2016. At 9.40 am, the scrip was trading at ₹256.30, up 7.6% from its previous close. The stock’s market cap increased by nearly $3.66 billion.

SBI to adopt repo rate as external benchmark for all floating rate loans from October 1
Posted on 23rd September 2019
State Bank of India on Monday said it will adopt repo rate as the external benchmark for all floating rate loans for MSME, home and retail loans, from October 1, 2019.

On September 4, the Reserve Bank of India (RBI) had mandated all banks to link all new floating rate personal or retail loans and floating rate loans to micro, small and medium enterprises (MSMEs) to an external benchmark from October 1 onwards.

Rupee slips 9 paise to 71.03 against U.S. Dollar in early trade
Posted on 23rd September 2019
The Rupee opened marginally lower by 9 paise to 71.03 against the U.S. Dollar in opening trade on September 23, as rising crude oil prices and concerns regarding U.S.-China trade war kept investors edgy.

Forex traders said reports that the U.S. is likely to ramp up pressure on China by raising existing tariffs if a trade deal is not reached soon between the two countries, weighed on the domestic currency.

» Post a FREE Classified Advertisement
Inviting Real Estate Agents, Job Placements Agents, Educational Institutes, Software Service Providers, Real Estate Builders, Marriage Bureaus, Travel Agents, Restaurant Owners, Health & Fitness Centers and other Local Businesses to Post a FREE Classified Advertisement on Classifieds Website.
Jobs in India India Real Estate Automobiles Matrimonials Beauty & Fitness

Add a comment for Fitch Ratings raises Reliance's outlook to positive
Please only use this form to enter comments on the above company. All comments are reviewed before they are displayed on the web site. Not all comments may be displayed. Check back with us to see if your comments have been displayed.
If you want us to email the comments posted by users, please Subscribe by email
Security Code*

Be the first person to write a business review for Fitch Ratings raises Reliance's outlook to positive

Most Read News

DLF sells New Gurugram land to American Express in one of ‘costliest’ land deals

Air India posts Rs 4,600 cr operating loss in 2018-19; aims profit this fiscal

Equitas Holdings tanks 17% as Sebi rejects draft scheme for Small Fin Bank

Air India posts Rs 4,600 cr operating loss in 2018-19; aims profit this fiscal

Amazon strengthens play in furniture segment ahead of festive season

More India News

Photo Gallery

Manchu Manoj(11 Images) Manchu Manoj
Kaashmora(11 Images)Kaashmora
Race3(10 Images) Race 3
  India Web Directory
Business Profiles
Automotive Directory
IT/ITES/BPO Directory
Hotel Directory
Health Directory
Business Directory
Gems & Jewellery
Education Directory
Real Estate Directory
Agriculture Directory
Logistics Directory
Yellow Pages
NRI Guide
Photo Galleries
Global Web Directory
*** FREE India Classifieds
Order Premium Listings
Submit a Site
Business Reviews
About us
Link to us
Contact us
Google Search Keywords: India Catalog, IndiaCatalog, India Web Directory
    © 1999 - 2019
    All Rights Reserved
Privacy Statement