ICRA upgrades the long term rating of IndianOil to LAAA

Aug. 9, 2010 - PRLog -- Recognising the positive move of the Government of India in granting autonomy to the PSU Oil Marketing Companies (OMCs) to revise petrol prices and possible autonomy in revising diesel prices in the near term, ICRA updraded the long term rating on outstanding long term debt programme of IndianOil from 'LAA+' to 'LAAA' (highest grade) on 28th June '10 . It may be recalled that ICRA  had earlier downgraded IndianOil's long term rating from LAAA to LAA+ in November 2007 on concern about high under-recoveries and its impact on profitability.

This upgrade reflects ICRA's belief that the set of measures announced by the Government will lower the gross under- recovery burden for the system as a whole and will translate to a better liquidity position and lower interest costs for the PSU OMCs.

In a similar move, Fitch Ratings on 29th June'10 has revised the Outlook from Negative to Stable on Long Term Foreign Currency Issuer Rating of 'BBB-' and National Long Term Rating of 'AAA (ind)' of IndianOil.

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IndianOil Corporation Ltd is India's largest commercial enterprise. The IndianOil Group of companies owns and operates 10 of India's 20 refineries.