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Reliance Infrastructure has secured a credit rating upgrade from India Ratings and Research, marking a three-notch improvement from 'IND D' to 'IND B / Stable / IND A4'. This development follows the company's extensive deleveraging, resulting in net zero debt with banks and financial institutions. Ind-Ra also withdrew earlier proposed ratings on fund-based and non-fund-based limits that were never availed. The company has ensured timely standalone debt servicing and completed one-time settlements for guaranteed debts via strategic capital infusion through warrant issues.
India Ratings and Research (Ind-Ra) has upgraded Reliance Infrastructure's credit rating from 'IND D' to 'IND B / Stable / IND A4', reflecting a significant three-notch rise after a prolonged six-year period of stagnation at the lowest grade. The improved rating is attributed to the company's comprehensive deleveraging, resulting in a net zero debt position with banks and financial institutions. Advertisement
The agency also withdrew ratings it had earlier assigned to proposed fund-based and non-fund-based working capital limits, as Reliance Infrastructure had not availed or raised these lines. In its regulatory filing, the company indicated that this upgrade demonstrates strengthened creditworthiness following consistent servicing of standalone debt obligations over the three-month period ending 30 June 2025.
On the matter of guaranteed debt, Reliance Infrastructure confirmed having executed one-time settlements with the lenders of its subsidiaries. A final repayment was made by JR Toll Road Private Limited on 23 June 2025, settling the obligations. These repayments were made possible by long-term capital infusions, notably via warrants totalling INR 3,010 crore. The company received INR 750 crore during FY25 and an additional INR 225 crore in the first quarter of FY26. These funds have significantly eased liquidity concerns, bolstering its financial standing.
Despite this progress, Ind-Ra has highlighted that the company's overall financial risk remains a constraint. This includes ongoing arbitration proceedings, substantial contingent liabilities, and large payables tied to both its standalone operations and distressed subsidiaries, all of which continue to be key areas for monitoring.
Nonetheless, the agency acknowledged the benefits of Reliance Infra's deleveraged balance sheet and enhanced revenue visibility from its engineering and construction (E&C) business. The firm is banking on new order inflows in the E&C segment to drive a business turnaround in FY26.
The company also disclosed that it had issued INR 3,010 crore worth of warrants in October 2024 and has board-sanctioned plans to raise INR 3,000 crore each through foreign currency convertible bonds (FCCBs) and a qualified institutional placement (QIP) of equity.
Source - PTI
5th Jun, 2025
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