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Oil India Ltd has been rated as Baa2 (stable) by Moody’s Investor Service. This is the maiden international credit rating evaluation of the Government-owned oil and gas explorer.
Baa2 rating reflects the baseline credit assessment of baa2, which is one notch higher than the rating given by Moody’s to the Government of India (Baa3 stable), OIL said in a statement.
“The fact that a public sector enterprise such as OIL, in which the Government holds 68.43 per cent of equity, has been rated one level up vis-à-vis its sovereign itself speaks volumes about the strong financial and operational management of the company,” the statement said.
Moody’s have used their standard methodologies for rating OIL, which included evaluation of key credit metrics made up of financial and operational performance, existing regulatory framework (including the subsidy and pricing mechanism) and the company’s future plans.
OIL has historically maintained a conservative financial profile. However, OIL plans to fund its expansion activities with a mix of operating cash flows and debt. This rating would help OIL access international markets for raising debt through bonds, it added.
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