ICRA reaffirms A1+ rating to Rs 500cr STD prog of RTL

New Delhi, Sep 28 (UNI) Credit rating agency ICRA has retained the A1+ rating for the Short-Term Debt (STD) programme of Reliance Telecom Ltd (RTL) for an enhanced amount of Rs 500 crore (from Rs 350 crore earlier).

The rating indicates highest-credit-quality in the short term and reflects RTL's established brand equity in the circles where it operates, its competitive cost structure and strong financial indicators as reflected by its Net Cash Accruals to Debt of around 1.8x and its interest coverage of around 14x as of FY06.

The rating also factors in the favorable demand outlook for the domestic wireless industry and improved growth statistics in B and C category circles; ownership of the Anil Dhirubhai Ambani (ADA) Group and the demonstrated group support received in the past.

In addition, ICRA expects the operating cash flows of RTL to remain strong in future and the company to maintain healthy debt protection indicators even as it raises additional debt in the medium term to finance network expansion.

The company had 2.1 million subscribers and had rolled out its network in 568 towns across these 7 circles as on June 2006.

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