Following the upgrade of India's sovereign rating to "Baa2", Moody's has also upgraded the issuer rating for five government-owned companies in the oil and gas sector to Baa2 from Baa3.
These entities are Oil and Natural Gas Corporation Ltd (ONGC), India Oil Corporation (IOC), Bharat Petroleum Corp Ltd (BPCL), Hindustan Petroleum Corp Ltd (HPCL), and Petronet LNG Ltd (PLL).
The outlook on these ratings have been revised to stable from positive, Moody's said a statement on Friday.
Vikas Halan, vice-president and senior credit officer, Moody's, said the rating upgrades for IOCL, BPCL, and HPCL
follow the upgrade of the sovereign rating. It reflects the strategic importance of the oil marketing companies as they own and operate the majority of the country's fuel refining entities and most of the fuel distribution infrastructure.
"The upgrade of the foreign currency ratings of ONGC
follows the raising of the ceiling for foreign currency bonds. ONGC's baa1 BCA and Baa1 local currency issuer rating remain unchanged," Halan said.
PLL's upgrade reflects the ratings upgrade of its key counterparts, including IOCL and BPCL, which have been a constraint on its ratings.
The Baa2 rating of Oil India Limited (OIL) is already at par with its baa2 BCA and also the upgraded rating of the Indian government. Thus, the upgrade of the sovereign rating has no impact on OIL's foreign currency issuer and bond ratings, Moody's added.