The basis for Reliance Credit Rating is the Industry Conditions and also its Financial Performance. The Credit Rating for Reliance Industries, Reliance Capital, Reliance Jio along with Reliance Communications and other Reliance Group Companies Credit Rating have been provided below. Reliance is an Indian Conglomerate operating in multiple fields like Oil and Petroleum, Textiles, Communications, Energy and Power etc. In 2001, Reliance Industries Ltd. and Reliance Petroleum Ltd. became India’s two largest companies in terms of all major financial parameters. In our previous post, we have already provided Credit Rating for DMart, Prataap Snacks and Continental Warehousing.
Reliance Jio Credit Rating:
Reliance Retail Credit Rating:
|Short Term||AAA – Stable|
|Long Term||AAA – Stable|
Reliance NCD’s Basis for Credit Rating
CRISIL has assigned its ‘CRISIL AAA/Stable’ rating to the Rs.50 billion Non-Convertible Debentures (NCD) of Reliance Jio Infocomm Ltd (Reliance Jio) while reaffirming the ratings on Reliance Jio’s existing non-guaranteed and guaranteed NCDs at ‘CRISIL AAA/Stable’ and ‘CRISIL AAA(SO)/Stable’ respectively.
The rating on the non-guaranteed NCDs of Reliance Jio continues to reflect Reliance Jio’s strategic importance to, and strong management and financial support expected from parent, Reliance Industries.
The ratings also factor in the potential benefits that Reliance Jio can reap on account of its large liberalised spectrum holding of 751 MHz (including both uplink and downlink) and technological advancements in the long-term evolution (LTE) technology as well as the rapidly evolving eco-system.
These rating strengths are partially offset by Reliance Jio’s exposure to implementation and technology risks pertaining to the roll-out of the telecommunications (telecom) services and to intense competition expected from well-entrenched players in the Indian telecom space.
Future Prospects : Reliance Jio Credit Rating
Credit Rating Agencies believes that Reliance Jio will remain strategically important to Reliance Industries, which will continue to provide strong management and financial support to the subsidiary.
The outlook may be revised to ‘Negative’ if there is a corresponding change in CRISIL’s outlook on Reliance Industries or if Reliance Jio takes significantly longer than expected to roll out telecom services and turn profitable.
The outlook may also be revised to ‘Negative’ if Reliance Industries’s ownership in Reliance Jio falls below 51 per cent or if there is any change in the strategic importance of Reliance Jio to Reliance Industries.
Brief History : Reliance Credit Rating
Reliance Jio, incorporated in 2007, is a subsidiary of Reliance Industries. Reliance Industries holds around 99 per cent of the subscribed equity shares of Reliance Jio. Reliance Jio originally had an all-India internet service provider (ISP) category ‘A’ licence.
The company was a successful bidder in all 22 Indian telecom circles in the auction of broadband wireless access (BWA) spectrum conducted by DoT in June 2010.
Subsequently, it got allocation of one block of 20 MHz in all 22 circles, for which it paid around Rs.128.5 billion. Reliance Jio is currently setting up a pan-India next-generation communication network.
In October 2013, Reliance Jio received the unified license for all 22 service areas across India and became the first telecom operator in the country to get a pan-India unified license.
The unified license allows Reliance Jio to offer all telecom services, including voice telephony, under a single license. With grant of the license, Reliance Jio has migrated its existing ISP license along with BWA spectrum to the unified license with authorisation for all services, except Global Mobile Personal Communication by Satellite Service, under the unified license in all service areas.
About Parent Company : Reliance Credit Rating
Reliance Industries is one of India’s largest private sector companies, with diverse interests including, petrochemicals, oil refining, and upstream oil and gas exploration and production.
Oil refining forms Reliance Industries’s largest activity; it accounted for around 71 per cent of the company’s revenue in 2014-15, followed by petrochemicals at 20 per cent. In the recent past, Reliance Industries has diversified into newer businesses, including organised retail, telecom, and financial services.
or 2014-15, Reliance Industries, on a consolidated basis, reported profit after tax (PAT) of Rs.236 billion on net sales of Rs.3.88 tReliance Industrieslion, against PAT of Rs.225 billion on net sales of Rs.4.34 tReliance Industrieslion for the previous year.
For the nine months ending December 31, 2015, Reliance Industries on a consolidated basis, reported a PAT of Rs. 202 billion (Rs. 172 billion for the corresponding period of the previous year) on net sales of Rs. 2.16 tReliance Industrieslion (Rs. 3.08 tReliance Industrieslion). The Credit Rating of Reliance is updated based on the latest Financial Statements.