Gujarat Gas gains on rating upgrade of its bank facilities

Gujarat Gas (GGL) rose 2.70% to Rs 230 after CRISIL upgraded its rating on Rs 2350 crore long-term bank facilities to AA+/Stable from AA/Positive.

The upgrade reflects CRISIL's expectations of an improvement in GGL's credit profile over the medium term. Sustainable improvement in cash accruals is expected to improve GGL's financial risk profile notwithstanding the sizeable capital expenditure (capex) programme, the ratings agency said in a note.

The rating continues to reflect the company's sizeable scale of operations as the largest CGO entity in India, its healthy financial risk profile and stable profitability levels. These strengths are partially offset by its exposure to volatility in R-LNG and domestic natural gas prices and exposure to regulatory risks.

CRISIL believes GGL will continue to depict a steady growth in operating performance, backed by healthy volume growth and stable realisation levels.

GGL is India's largest City Gas Distribution company.

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