Reliance Industries' FC IDR Reflects Strong External Debt Service Ratio

Fitch Ratings has said the upgrade of Reliance Industries Ltd's (RIL's) long-term foreign-currency (FC) issuer default rating (IDR) to BBB in June -- a notch above India's country ceiling of BBB-minus -- reflects the expectation that RIL's hard-currency (HC) external debt-service ratio will remain above 1.0x over the next 12 months.

Also, Fitch expects RIL's deleveraging to continue, supported by growing cash generation, receipt of the balance of funds from a rights issue, and capex below historical levels.

This is despite RIL's announcement it will invest Rs 75,000 crore in the new energy business over the next three years.

Fitch also released a new report addressing the following frequently-asked investor questions relating to its approach for rating RIL's FC IDR above India's country ceiling, and the likely impact of some of the company's recent announcements on RIL's ratings, especially relating to the new energy business.