Mumbai, Oct 15: Standard and Poor's ratings services today affirmed its ‘BB’ long term foreign currency ratings on Reliance Industries Ltd as the company's credit quality has remained within the current rating parameters. "The outlook is negative," an S&P press release said here, adding that "reliance foreign currency rating remains constrained by the sovereign credit risk of the republic of India".
S&P credit analyst and director Sharad Jain said the company, like any other Indian corporate entities, was subject to the foreign exchange controls and regulations imposed by the government of India.
India continues to exercise tight control over foreign exchange flows, despite substantial liberlisation efforts in the past decade. The company remains highly dependent on the Indian market from which it generates about 85 per cent of its revenues, he said.
One of the main risks affecting Reliance's credit quality arises from the pressures on its business and financial profile due to its diversification into telecommunications, its plan to substantially expand the gas exploration and production business and its plans to set up a network for retailing petroleum products, he added.
Bureau Report