Singapore, November 08, 2019 -- Moody's Investors Service ("Moody's") has taken
a number of rating actions on Indian non-financial corporates,
following its earlier announcement that it has changed the outlook on
India's Baa2 sovereign rating to negative from stable.
As a result of the sovereign rating action, Moody's has changed
the outlook on the ratings of the following companies:
Bharat Petroleum Corporation Limited (BPCL): Affirmed Baa2 foreign
currency issuer and senior unsecured debt ratings and revised outlook
to negative from stable. Also affirmed the (P)Baa2 foreign currency
senior unsecured rating on the MTN program. The ba1 baseline credit
assessment (BCA) is affirmed.
Hindustan Petroleum Corporation Ltd. (HPCL): Affirmed Baa2
foreign currency issuer and senior unsecured debt rating and revised outlook
to negative from stable.
Indian Oil Corporation Ltd (IOCL): Affirmed Baa2 foreign currency
issuer and senior unsecured debt ratings and revised outlook to negative
from stable. The ba1 BCA is affirmed.
Oil and Natural Gas Corporation Ltd. (ONGC): Affirmed Baa1
local and foreign currency issuer rating; revised outlook to negative
from stable. Also affirmed the (P)Baa1 foreign and local senior
unsecured ratings on the MTN program. The baa1 BCA is affirmed.
Oil India Limited (OIL): Affirmed Baa2 local and foreign currency
issuer and foreign currency senior unsecured debt ratings; revised
outlook to negative from stable. The baa3 BCA is affirmed.
Petronet LNG Limited (PLL): Affirmed Baa2 foreign currency issuer
rating; revised outlook to negative from stable.
Infosys Limited (Infosys): Affirmed A3 local currency issuer rating
and revised outlook to negative from stable.
Tata Consultancy Services Limited (TCS): Affirmed A3 local currency
issuer rating and revised outlook to negative from stable.
A full list of affected ratings is provided towards the end of this press
release.
RATINGS RATIONALE
The negative outlook reflects that Moody's will downgrade the ratings
of these companies if Moody's downgrades the rating of India sovereign
to Baa3 from Baa2.
"Ratings of IOCL, BPCL and OIL incorporate our expectation of support
from the Indian government. Therefore a downgrade of the rating
of the sovereign to Baa3 from Baa2 will result in downgrade of the respective
Baa2 ratings of these companies," says Vikas Halan, a Moody's
Senior Vice President.
"Although the Baa1 rating of ONGC does not incorporate any uplift
because of support from the Indian government, it is constrained
at no higher than one notch above the sovereign rating. Therefore
a downgrade of the sovereign rating will also result in downgrade of the
rating of ONGC. Further, the rating of HPCL, which
also incorporates expectation of support from the government of India,
through ONGC, will also be downgraded if we downgrade the rating
of ONGC and the sovereign," adds Halan, who is the lead
analyst for the Indian oil and gas companies at Moody's.
"PLL's rating is constrained by the credit quality of its
key offtakers -- IOCL, BPCL and Gail (India) Limited.
The respective ratings of these companies will be downgraded following
a sovereign downgrade, which will then result in the downgrade of
PLL," adds Halan.
"Ratings for Infosys and TCS are constrained to no more than two
notches above the sovereign rating. Therefore a sovereign rating
downgrade will also result in downgrade of the A3 ratings of Infosys and
TCS," says Kaustubh Chaubal, a Moody's Vice President
-- Senior Credit Officer.
The principal methodologies used in rating Oil and Natural Gas Corporation
Ltd., ONGC Videsh Vankorneft Pte. Ltd.,
and ONGC Videsh Limited were Integrated Oil and Gas Methodology published
in September 2019, and Government-Related Issuers published
in June 2018. The principal methodologies used in rating Oil India
Limited and Oil India International Pte. Ltd. were Independent
Exploration and Production Industry published in May 2017, and Government-Related
Issuers published in June 2018. The principal methodologies used
in rating Indian Oil Corporation Ltd, Bharat Petroleum Corporation
Limited, and BPRL International Singapore Pte. Ltd.
were Refining and Marketing Industry published in November 2016,
and Government-Related Issuers published in June 2018. The
principal methodology used in rating Hindustan Petroleum Corporation Ltd.
was Refining and Marketing Industry published in November 2016.
The principal methodology used in rating Petronet LNG Limited was Midstream
Energy published in Decmber 2018. The principal methodology used
in rating Tata Consultancy Services Limited and Infosys Limited was Business
and Consumer Service Industry published in October 2016. Please
see the Rating Methodologies page on www.moodys.com for
a copy of these methodologies.
BPCL is headquartered in Mumbai. The company is a leading downstream
company, specializing in oil refining, marketing, distribution,
and the retailing of petroleum products. The company is listed
on the Indian stock exchanges and is 53.29% owned by the
Indian government as of 30 September 2019.
HPCL, headquartered in Mumbai, is one of the leading downstream
companies in India, specializing in oil refining, marketing,
distribution and the retailing of petroleum products. It is listed
on the Indian stock exchanges and is 51.11% owned by ONGC.
Infosys is one of the world's leading IT services, consulting,
outsourcing and digital technology companies. The company's operations
are spread across North America (representing 61.4% of group
revenue for the quarter ended 30 September 2019 [second quarter of
fiscal 2020]), Europe (24.1%), the rest of the
world (11.8%) and India (2.7%).
IOC, headquartered in New Delhi, is a leading downstream company,
specializing in oil refining, marketing, distribution,
and the retailing of petroleum products. It is listed on the Indian
stock exchanges and is 51.5% owned by the Indian government
as of 30 September 2019.
ONGC is India's largest integrated oil and gas company. Its main
operations include upstream exploration and production, although
it also has operations in downstream segments. The company recorded
consolidated oil and gas production of 1.3 million barrels of oil
equivalent (boe) per day for the fiscal year ended 31 March 2019 (fiscal
2019). It is listed on the Indian stock exchanges and is 62.98%
owned by the Indian government as of 30 September 2019.
OIL is a state-owned upstream oil and gas company in India.
It focuses on crude oil and natural gas E&P in India. OIL also
conducts international exploration activities through joint venture arrangements.
The company is listed on the Indian stock exchanges and is 59.57%
owned by the Indian government.
PLL was formed in 1998 by the Indian government to import LNG and set
up LNG terminals in the country. The company commenced commercial
operations in April 2004. The company is a joint venture promoted
by Gail (India) Limited, ONGC, IOC and BPCL, with authorized
capital of INR30 billion. Each of these entities has a 12.5%
equity share, totaling 50%. The remaining 50%
is held publicly.
TCS is India's largest and one of the world's leading IT consulting services
and business process outsourcing (BPO) firms, and is 72.05%
owned by Tata Sons as of 30 September 2019.
LIST OF AFFECTED RATINGS:
.Issuer: Bharat Petroleum Corporation Limited
..Long-term Foreign Currency Issuer Rating,
affirmed at Baa2
..Long-term Foreign Currency Senior Unsecured MTN
Program, affirmed at (P)Baa2
..Long-term Foreign Currency Senior Unsecured Regular
Bond/Debenture, affirmed at Baa2
.. Outlook is revised to negative from stable
.Issuer: BPRL International Singapore Pte. Ltd.
..Backed Long-term Foreign Currency Senior Unsecured
MTN Program, affirmed at (P)Baa2
..Backed Long-term Foreign Currency Senior Unsecured
Regular Bond/Debenture, affirmed at Baa2
.. Outlook is revised to negative from stable
.Issuer: Hindustan Petroleum Corporation Ltd.
..Long-term Foreign Currency Issuer Rating,
affirmed at Baa2
..Long-term Foreign Currency Senior Unsecured Regular
Bond/Debenture, affirmed at Baa2
.. Outlook is revised to negative from stable
.Issuer: Indian Oil Corporation Ltd
..Long-term Foreign Currency Issuer Rating,
affirmed at Baa2
..Long-term Foreign Currency Senior Unsecured Regular
Bond/Debenture, affirmed at Baa2
.. Outlook is revised to negative from stable
.Issuer: Infosys Limited
..Long-term Local Currency Issuer Rating, affirmed
at A3
.. Outlook is revised to negative from stable
.Issuer: Oil and Natural Gas Corporation Ltd.
..Long-term Local Currency and Foreign Currency Issuer
Rating, affirmed at Baa1
..Long-term Local Currency and Foreign Currency Senior
Unsecured MTN Program, affirmed at (P)Baa1
..Outlook is revised to negative from stable
.Issuer: ONGC Videsh Limited
..Backed Long-term Foreign Currency Senior Unsecured
Regular Bond/Debenture, affirmed at Baa1
..Backed Long-term Foreign Currency and Local Currency
Senior Unsecured MTN Program, affirmed at (P)Baa1
. Outlook is revised to negative from stable
.Issuer: ONGC Videsh Vankorneft Pte. Ltd.
..Backed Long-term Foreign Currency Senior Unsecured
Regular Bond/Debenture, affirmed at Baa1
.. Outlook is revised to negative from stable
.Issuer: Oil India Limited
..Long-term Local Currency and Foreign Currency Issuer
Rating, affirmed at Baa2
..Long-term Foreign Currency Senior Unsecured Regular
Bond/Debenture, affirmed at Baa2
..Outlook is revised to negative from stable
.Issuer: Oil India International Pte. Ltd.
..Backed Long-term Foreign Currency Senior Unsecured
Regular Bond/Debenture, affirmed at Baa2
.. Outlook is revised to negative from stable
.Issuer: Petronet LNG Limited
..Long-term Foreign Currency Issuer Rating,
affirmed at Baa2
..Outlook is revised to negative from stable
.Issuer: Tata Consultancy Services Limited
..Long-term Local Currency Issuer Rating, affirmed
at A3
.. Outlook is revised to negative from stable
REGULATORY DISCLOSURES
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
to the assignment of the definitive rating in a manner that would have
affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead rating analyst and the Moody's legal entity that has issued
the ratings.
The person who approved Oil and Natural Gas Corporation Ltd.,
ONGC Videsh Vankorneft Pte. Ltd., ONGC Videsh Limited,
Oil India Limited, Oil India International Pte. Ltd.,
Indian Oil Corporation Ltd, Bharat Petroleum Corporation Limited,
BPRL International Singapore Pte. Ltd., Hindustan
Petroleum Corporation Ltd., and Petronet LNG Limited's credit
ratings is Laura Acres, Managing Director, Corporate Finance
Group, 852 3758 1350, 852 3551 3077. The person who
approved Tata Consultancy Services Limited and Infosys Limited's credit
ratings is Ian Lewis, Associate Managing Director, Corporate
Finance Group, 852 3758 1350, 852 3551 3077.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Vikas Halan
Senior Vice President
Corporate Finance Group
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Laura Acres
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077