SP affirms 'BBB' ratings to Reliance Ind post IPCL merger

Mumbai, Mar 29 (UNI) Standard&Poor's (S&P) Ratings Services today said it had affirmed its long-term foreign and local currency ratings on India's Reliance at 'BBB', following an approval by Reliance's board of directors of the proposed merger with Indian Petrochemicals Corp Ltd (IPCL) and said that the outlook was stable.

We expect the combined entity to benefit from greater market dominance and higher integration, and to maintain a relatively strong financial profile, a company release here said.

As the merger is a cashless transaction involving a swap of shares, it will not have any negative impact on Reliance's financial profile, said Standard&Poor's credit analyst Anshukant Taneja.

The ratings on Reliance continues to factor in the likelihood of timely completion of its ongoing projects, specifically the new refinery at Jamnagar, India.

''The ratings are also underpinned by the expectation that Reliance will pursue its noncore businesses, particularly investments in the retail sector, following a modular plan, as an accelerated investment strategy may weigh on the company's overall credit profile,'' Mr Taneja added.

UNI