Moody’s Investors Service on Tuesday placed the ratings for Bharat Petroleum Corporation Ltd (BPCL) under review for downgrade, citing potential uncertainties the state-run oil marketing company would face in the absence of the government support it currently enjoys. The agency’s present rating for BPCL is ‘Baa2’ and this takes into consideration the “expected extraordinary support from the government”.
“Post the government’s stake sale, we will not include the two-notch uplift from government support in BPCL’s rating,” said Vikas Halan, senior vice-president, Moody’s. This could result in downgrade of BPCL’s ratings to ‘Ba1’, which denotes medium-grade and is subject to moderate credit risk. The new rating would depend on the credit quality of the buyer and its willingness to provide support to the company.
