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Moody's affirms RIL's Baa2 ratings with a stable outlook

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Moody's Investors Service on Thursday affirmed Reliance Industries' (RIL) Baa2 domestic long-term issuer rating and foreign currency senior unsecured rating.

At the same time, Moody's has affirmed the Baa2 backed domestic currency senior unsecured debt ratings on the USD denominated bonds issued by Reliance Holding USA, Inc., with a guarantee from RIL. The outlook on the ratings above is stable.

"The ratings affirmation reflects the significant improvement in RIL's scale and business mix over the last two years, as it reaps the benefits from its investments over the last five years in its hydrocarbon and consumer businesses," says Vikas Halan, a Moody's Senior Vice President.

"The affirmation also incorporates our expectation that RIL's credit metrics will remain appropriate for its Baa2 ratings over the next 12-18 months, as the company has completed its investment cycle and will start reducing its borrowings through higher earnings," adds Halan.

Over the last five years, RIL has spent Rs 3.6 trillion on increasing its refinery complexity, expanding its petrochemical capacity, building its digital services business and expanding its retail business.

In addition to the improved efficiency and scale of the legacy refining and petrochemical segments, RIL has also added highly resilient digital services and retail segments into its business mix.

Given the change in RIL's business mix, Moody's no longer views RIL as only an oil refining and marketing company but a mix of diverse businesses.

Shares of Reliance Industries fell 0.95% to Rs 1458.25 on Thursday. During the day, the scrip traded in the range of Rs 1456.05 and Rs 1481.

RIL's consolidated net profit rose 18.35% to Rs 11262 crore on 3.63% rise in net sales to Rs 148526 crore in Q2 September 2019 over Q2 September 2018.

Reliance Industries is an Indian multinational conglomerate company. The company owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications.

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First Published: Thu, November 14 2019. 16:04 IST