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| Standard & Poor's ratings services affirms its long-term foreign and local currency ratings on Reliance Industries Ltd. (RIL) at 'BBB'
Standard & Poor's Ratings Services in a communique issued from Singapore yesterday affirmed its long term foreign and local currency ratings on Reliance Industries Ltd. (RIL) at 'BBB'. The outlook is stable. | |||
| 30 Dec 2006
, Mumbai
: Standard & Poor's Ratings Services in a communique issued from Singapore yesterday affirmed its long term foreign and local currency ratings on Reliance Industries Ltd. (RIL) at 'BBB'. The outlook is stable. "The affirmation reflects Reliance's dominant competitive position, the relatively stable medium term prospects for its core refining and petrochemical businesses, and an overall moderate financial profile of the company," said Standard & Poor's credit analyst Anshukant Taneja. The ratings factor in the likelihood of timely completion of its ongoing projects, specifically the new refinery at Jamnagar, India. The ratings are also underpinned by the expectation that Reliance would pursue its noncore businesses, specifically investments in the retail sector, in a modular phased-out manner, as an accelerated investment strategy can weigh on the company's overall credit profile. "The ratings remain constrained by Reliance's exposure to highly cyclical industries, large capital commitments in its refining, exploration and production businesses, and uncertainties in developing its reportedly large gas reserves," added Mr. Taneja. Standard & Poor's views Reliance's Indian rupee (INR) 617 billion (US$13.5 billion) capital expenditure plan with caution, given potential softening in the petrochemical cycle, reduced demand for refined petroleum products, and uncertainties related to the company's upstream gas business. Lower-than-expected cash flows for funding a part of the capital expenditure could mean higher borrowings, which would weaken the company's credit protection measures. "Reliance's current financial position, strong liquidity, and high access to financial resources do mitigate some of these risks," noted Mr. Taneja. Reliance is India's largest private sector company. Its two main lines of business are oil refining and petrochemicals production, accounting for about 67% and 31% of revenue, respectively, for the fiscal year ended March 31 2006. Reliance had revenues of INR891 billion and net income from continuing operations of INR90.6 billion in fiscal 2006. Reliance Industries Limited Reliance Industries Limited (RIL) is Indias largest private sector company on all major financial parameters with turnover of Rs 89,124 crore (US$ 20 billion), cash profit of Rs 13,174 crore (US$ 3 billion), net profit of Rs 9,069 crore (US$ 2 billion), net worth of Rs 49,804 crore (US$ 11 billion) and total assets of Rs 93,095 crore (US$ 20.9 billion). RIL is the first and only private sector company from India to feature since 2004 Fortune Global 500 list of Worlds Largest Corporations and ranks amongst the worlds Top 200 companies in terms of profits, RIL is also ranked amongst the top 25 climbers in the list for second consecutive year. RIL emerged in the worlds 10 most respected energy/chemical companies and amongst the top 50 companies that create the most value for their shareholders in a global survey and research conducted by PricewaterhouseCoopers and Financial Times in 2004 . RIL also features in the Forbes Global list of worlds 400 best big companies and in FT Global 500 list of worlds largest companies. |
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