New Delhi: The government’s 10% stake sale in Indian Oil Corp (IOC) will not have any impact on the company’s ratings, Moody’s Investors Service and Fitch Ratings said on Wednesday.
In separate statements issued today, the two global agencies said that after the stake sale, the government will continue to hold a majority stake of 58.57% in IOC.
The government on Monday sold 10% stake in IOC through an offer for sale and raised over Rs 9,300 crore.
Moody’s Investors Service said IOC’s ratings remain supported by its strategic importance to the country, given its position as India’s largest refiner and distributor of petroleum products.
“The government will retain its majority stake in the company after the stake sale, and as such does not affect our assessment of sovereign support for IOC,” Moody’s VP and Senior Credit Officer Vikas Halan said.
Fitch Ratings said refiner Indian Oil Corporation’s ratings is “unaffected” by lower state stake.
The other two smaller state-controlled oil refining and marketing companies — BPCL and HPCL — historically have had lower state ownership at 55% and 51%, respectively, it added.
“Fitch believes that the state continues to have close operating and strategic linkages with these entities despite the recent reforms in fuel prices and subsidy schemes.”
“We believe these three companies will continue to be important policy tools that the state will use to meet socio-economic objectives when required,” it further said.
Moody’s added that it would reassess the level of government support incorporated in the company’s ratings only if the government’s shareholding falls below 51%, or if there are other indicators of a change in the relationship between the government and IOC.
“However, we see this as an unlikely scenario, given the strategic importance of IOC as the country’s largest downstream oil company with a 31% share of the domestic refining capacity,” Halan said.