RIL Gets Credit Rating Upgrade From S&P Global On Improving Cash Flow Stability

Reliance Industries Ltd. has received a credit rating upgrade from multinational agency S&P Global Ratings. The long-term issue ratings on the company's senior unsecured debt has been raised to 'A-' from 'BBB+' along with a stable outlook.

"Reliance Industries will continue to increase cash flow from less cyclical consumer-facing businesses, which will improve its earnings quality. The company's good competitive position across its businesses will further drive earnings and cash flow, which should cover heavy investments in key businesses," S&P Global said in its observation.

Analysts said rising earnings from the digital service segment will reduce the Mukesh Ambani-led group's exposure to the volatile oil industry. They forecast digital services and the retail business to contribute to about 60% of operating cash flow in fiscal 2026.

The oil-to-chemicals (O2C) and oil and gas segments of RIL will account for the remaining 40%.

The agency estimates an adjusted ratio of debt to EBITDA of below 2x over the next 12-24 months.

The analysts noted that downside rating pressure could arise if RIL deviates from its financial policy and undertakes aggressive debt-funded investments without earnings accretion.

The oil-to-telecom group has a track record of monetising assets to pare down debt following periods of high investments, S&P Global said, citing the large fundraise from global investors in 2021 which reduced its leverage ratios. The planned listing of Reliance Jio could further diversify the group's fund-raising avenues.

Reliance Industries can absorb high-impact, low-probability events such as a huge spike in crude oil prices with limited need for refinancing. The company had a cash and cash equivalent balance including current investments of Rs 2.2 lakh crore as of Sept. 30, 2025, versus current debt of Rs 88,700 crore.

It also has a growing proportion of earnings from digital services, which have more stable cash flow and a shorter cash conversion cycle, the agency said.