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Crisil to retain rating despite buyback

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Our Banking Bureau Mumbai
Rating agency Crisil today said it has taken cognisance of the share buyback announcement by Reliance Industries Ltd (RIL) and the buyback involving a maximum outflow of Rs 3,000 crore will not have a material impact on its financial risk profile. Crisil currently has credit ratings of 'AAA/Stable/P1+' outstanding on the debt instruments of RIL.
 
"Crisil continues to maintain a dialogue with RIL on the ownership issues facing the Reliance group. If there is a material impact on the business and growth strategies or management structure of RIL due to ownership and governance related issues, Crisil will review its ratings," a release from the rating agency said.
 
The company generated net cash accruals (NCA) of around Rs 75,000 crore in FY04. For the first half of FY05, RIL has reported NCA of around Rs 50,000 crore (up from around Rs 38,000 crore for the corresponding period last year). As on September 30, 2004, the company had cash and liquid investments estimated at around Rs 29,000 crore.
 
The buyback results in an increase in the gearing (total debt/ tangible networth) as on September 30, 2004 to 0.62 times from 0.57 times without factoring in the outflow, the release said.

 

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First Published: Dec 28 2004 | 12:00 AM IST

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