S&P upgrades Reliance's long-term rating to 'BBB'

Standard & Poor's (S&P) today upgraded its long-term foreign and
local currency ratings for Reliance Industries to BBB' from 'BB+' with a
stable outlook.

"The upgrade in the ratings took into account Reliance's competitive position in refining and petrochemicals, its divestment of capital-intensive non-core telecom and power businesses, and an overall moderate financial profile," S&P said in a statement.

Anshukant Taneja, credit analyst of S&P, said: "The ratings remain constrained by Reliance's exposure to highly cyclical industries, large capital commitments in its refining, exploration and production businesses, and uncertainties in developing its reportedly large gas reserves."

The ratings factor in the demerger arrangement, as approved by shareholders and creditors of the company, which does not entail any material cash outflows from reliance. "The timely completion and continuity of this demerger arrangement is critical for the outlook and ratings," the statement said.