Fitch publishes ONGC's BBB-minus rating, outlook negative

Singapore, July 2 : Fitch Ratings has published Oil and Natural Gas Corporation's (ONGC's) long-term foreign-currency issuer default rating of BBB-minus.
The outlook is negative. The agency has also assigned a BBB-minus rating to the company's US dollar senior unsecured notes.
Fitch has also assigned BBB-minus ratings on foreign-currency guaranteed notes issued by ONGC's subsidiary ONGC Videsh Ltd (OVL) and OVL's subsidiary ONGC Videsh Vankorneft Pte Ltd, and the medium-term note programme co-issued by the three entities.
ONGC's ratings are constrained by India's rating (BBB-minus/negative).
Fitch assessed ONGC's standalone credit profile at bbb-plus, reflecting its scale as the largest oil and gas producer in India, significant reserves and production, and a diversified business model comparable with that of peers rated in A category by Fitch counterbalanced by a moderate financial profile.
ONGC had Rs 12,300 crore of readily available cash as of FY21 and Rs 7,300 crore of undrawn short-term credit lines at the standalone level currently, said Fitch.
"We expect ONGC to generate negative free cash flow in the next few years. But we believe it can secure adequate funding when needed due to its ready access to domestic and international capital markets and banks."