Moody’s Investors Service on Tuesday downgraded the credit quality rating of state-run Oil and Natural Gas Corporation (ONGC) by one notch to ‘Baa2’, mainly due to its weak cash reserves amid the increasingly uncertain global oil price environment.
The company’s rating was also adversely affected by the government’s 2016 mandate which requires all government-owned companies to pay a minimum annual dividend, equal to 5% of their net worth, even if they do not have sufficient profits.
