ICRA reaffirms LAAA to GAIL's Rs 15 bln bonds programme

New Delhi, May 10 (UNI) ICRA has reaffirmed the LAAA rating, indicating highest credit quality, to the Rs 15 billion bonds programme of Gas Authority of India Ltd (GAIL).

The rating takes into account GAIL's ownership by the Government, it's market position in the gas transmission and distribution business and its financial position.

The rating also takes into account the strong cash flows from the LPG and the petrochemical businesses, which have benefitted in recent times from the increase in product prices.

ICRA also notes that concerns over regulatory environment governing pipelines tariff are lower as the proposed changes in tariff are largely revenue neutral to GAIL.

In the medium term, however, GAIL would face the risk of declining gas transportation volumes, which it is trying to mitigate by investing in exploration and production activities.

GAIL is also undertaking sizeable investments for expanding its pipeline network and setting up greenfield petrochemical complexes, which will expose it to project implementation risks.

UNI CS PV GC1450