| Reliance Industries Limited | ||||||||||
| Ratings reaffirmed at 'Crisil AAA / Stable / Crisil A1+ ' | ||||||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||||||
| 1 crore = 10 million | ||||||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its 'Crisil AAA/Stable/Crisil A1+' ratings on the existing debt instruments and bank loan facilities of Reliance Industries Ltd (RIL).
Further, Crisil Ratings has withdrawn its rating on the non-convertible debentures (NCDs) aggregating Rs 3,795 crore (see annexure Details of Rating Withdrawn) on receipt of requisite documents. The withdrawal is in line with Crisil Ratings policy on withdrawal of ratings.
The reaffirmation continues to factor RIL's leadership position and strong competitiveness in the oil to chemical (O2C) business, leadership position attained by Reliance Jio Infocomm Ltd (RJIL; 'Crisil AAA/Stable/Crisil A1+') in the telecommunications (telecom) industry and by Reliance Retail Ventures Ltd (RRVL; 'Crisil AAA/Stable/Crisil A1+') in the retail industry, along with its exceptional financial flexibility.
In fiscal 2025, operating profit was driven by strong growth in digital services and retail segments, however, offset by industry-wide challenges in the oil to chemical segment. Operating profitability in the oil to chemical segment moderated owing to product cracks falling sharply due to increased supply of products and lower global demand. The O2C business has shown a strong rebound in the first six months of fiscal 2026 because of favourable margins on domestic fuel retail and improvements in transportation fuel cracks as well as polypropylene (PP) and polyvinyl chloride (PVC) deltas, which translated into healthy growth.
The company reported healthy year-on-year growth of ~15% in operating profits in the first six months of fiscal 2026 even as revenue grew by 8% for the same comparative period. Digital services continues to grow on account of improvement in average revenue per user (ARPU) and strong subscriber growth momentum across mobility and homes, while growth in retail segment will continue on the back of store expansions and cost efficiency.
The ratings factor the inherent cyclicality in the profitability of the company particularly in the refining, petrochemical and natural gas segment. The operating profitability in exploration and production (E&P) segment is expected to moderate in fiscal 2026 given softening crude oil prices, however, should continue to be supported by stable gas prices. Nonetheless, the risk of cyclicality is mitigated by the increasing share of profits from the relatively stable telecom and retail businesses leading to business diversification.
The ratings are constrained by intense competition in the retail segment wherein margins remain modest and the continuous technological changes seen in the telecom business, which result in sustained investments to ensure industry-leading service offerings.
RIL is also making significant investments in building its new energy business, primarily in clean energy. The business will remain exposed to technology risks as there are several competing technologies in the clean energy space and a dominant technology platform is yet to emerge.
The consolidated earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at Rs 99,467 crore for the six months ended September 2025 as compared to Rs 86,682 crore in the corresponding period of the previous fiscal. |
Analytical Approach Crisil Ratings continues to follow an analytical approach that combines the business and financial risk profiles of RIL and its subsidiaries, as these entities are part of RIL’s core operations.
Crisil Ratings has also fully combined the associate companies that are strategically important to RIL and have significant operational linkages with it. These companies are part of the Reliance Industries Holding Pvt Ltd group, viz. Jamnagar Utilities and Power Pvt Ltd (JUPPL; 'Crisil AAA/Stable/Crisil A1+') and Sikka Ports & Terminals Ltd (SPTL; 'Crisil AAA/Stable/Crisil A1+'). Crisil Ratings considers these entities as strategic given their strong integration with RIL's oils-to-chemicals operations.
RIL had transferred the fibre and tower assets of RJIL, along with a portion of its liabilities, to two special purpose vehicles (SPVs): Jio Digital Fibre Pvt Ltd (JDFPL; 'Crisil AAA/Stable/Crisil A1+') and Summit Digitel Infrastructure Pvt Ltd (SDIPL; 'Crisil AAA/Stable') that are held by separate trusts outside RIL. While the SPVs operate independently, RJIL has entered into off-take arrangements with these SPVs given the criticality of these assets for its operations. Crisil Ratings has thus capitalised the present value of a part of payments as per the long-term contracts, as per applicable accounting standards. Crisil Ratings has followed a similar approach for contractual obligations made to Pipeline Infrastructure Ltd (PIL; 'Crisil AAA/Stable').
Pass-through certificates (PTCs) issued by First Business Receivables Trust ('Crisil AAA(SO)/Stable'), under a securitisation transaction originated by RIL, have been added to debt.
Deferred payment liabilities of RJIL towards the Department of Telecommunication (DoT) for acquisition of spectrum too, has been considered as debt.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Leadership and strong competitiveness in the O2C business in India The O2C business portfolio spans transportation fuels, polymers and elastomers, intermediates, and polyesters. The O2C business includes assets comprising refineries and petrochemical units that are integrated across sites, along with logistics and supply chain infrastructure. The company is amongst the top global petrochemical manufacturers. It is the world’s largest integrated producer of polyester, world’s third largest producer of paraxylene (PX) and among the top five global producers of purified terephthalic acid (PTA) and polypropylene. In India, RIL accounts for nearly half of the total domestic cracker (ethylene) capacity and has a production share of more than 50% in the polymers (PE, PP and PVC) market. Its strong market position helps it operate its petrochemical plants at full capacity and also benefits from its large scale.
RIL operates one of the largest ethane transportation facilities, which enables a sizeable procurement of ethane from North America. This provides RIL significant feedstock flexibility for its balanced cracker portfolio comprising heavy (naphtha) and light feed (ethane, ROGC) crackers. Moreover, its Refinery Off-Gas cracker (ROGC) project enables the use of off-gas, which is a by-product of its refinery.
RIL's competitive advantage in refining arises from its global-scale capacity as the largest single-site refinery in the world, broad product portfolio, and highly integrated operations. With a crude refining capacity of 1.4 million barrels per day (mbpd), RIL is a significant player in the domestic oil refining market with a refining capacity share of about 27%. Company has consistently maintained high utilisation levels over the years. The Jamnagar site benefits from a superior Complexity Index (CI) of 21.1, which makes it amongst the most complex in the world, enabling RIL to process crudes of varying specific gravity and sulphur content.
High utilisation of the refineries helps maintain strong operating efficiency and healthy profitability. In addition, RIL's proximity to oil fields in West Asia (its facilities are located along India's western coast) gives it a logistical advantage, as it helps control transportation cost in procuring crude and exporting refined products.
RIL's strong competitive advantage has been enhanced by improved energy efficiency contributed by its pet-coke gasification project. In the long term, RIL plans to maximise downstream and reduce transportation fuels footprint in a phased manner, to hedge the risk of flagging demand for automotive fuels.
Strong market position in the retail segment RRVL continues to consolidate its position as India’s largest retailer by revenue, scale and profits. It is widely spread in tier-2 and tier-3 cities, with a network of 19,821 stores as on September 30, 2025. The company’s strong market position is reflected in its leadership position across several formats and has been supported by consistent revenue and profit growth. The company has been expanding its footprint by adding stores, expanding the reach of its digital and new commerce platforms and enhancing product and service offerings. The expansion coupled with the acquisition of several brands and presence across consumption baskets has aided the retail segment’s revenue growth and profit.
Sustained market share leadership in telecom RJIL, subsidiary of Jio Platforms Ltd (JPL; Crisil A1+), has leadership position in terms of subscriber and revenue market share in the Indian telecom industry. As per the Telecom Regulatory Authority of India, the company had a wireless subscriber base of 47.9 crore as on August 31, 2025 (market share of ~41%). Revenue market share (including national and international long distance) stood strong at ~41% for the quarter ended June 2025.
RJIL purchased spectrum worth ~Rs 974 crore during the auction held in June 2024. Post auction, RJIL’s total owned spectrum footprint has increased significantly to 26,801 megahertz (MHz) (uplink + downlink), which is the highest in India. Besides, the company also has access to an extensive network of telecom towers and optical fibre network in the country. This, along with the acquisition of spectrum in premium 700 MHz band in the auction held in August 2022, has helped the company to provide superior service and enhanced coverage across circles, resulting in better operating efficiency.
Rising data usage should continue to drive ARPU in the near term, thereby boosting further growth in revenue as well as operating profit.
Exceptional financial flexibility RIL's financial flexibility is demonstrated by its ability to raise resources by tapping the capital markets and through its large cash and liquid investments. RIL has a proven track record in raising funds from the international/domestic bond markets with long tenures at competitive rates. Financial flexibility is also supported by unutilised bank lines. The company has a strong financial risk profile underpinned by stable, healthy profitability, and strong debt protection metrics. |
Key Rating Drivers - Weaknesses Susceptibility to volatility in crude oil prices Crude oil prices have been volatile over the past few years. due to ongoing geo-political tensions, tariff related uncertainties, supply chain disruptions and electric vehicle (EV) transition. The upward revision in the prices of feedstock and downturns in product prices resulting from existing or future excess industry capacities may adversely impact the company’s revenue and profitability. However, RIL’s presence across transportation fuels and significant portion of petrochemical value chain helps it counter the effect of these volatilities and cyclicality to a large extent. Also, diversified feedstock flexibility and strong domestic presence with extensive supply chain helps mitigate global uncertainties and challenges. Most payables and receivables of this business have strong linkage to international prices, which are USD denominated. This minimises cash flow risk considering fluctuations in foreign exchange rates.
Exposure to regulatory and technological risks in the telecom sector Regulatory and policy changes have played a central role in defining the risk characteristics of the Indian telecom sector, which is structurally dynamic. The telecom industry also remains susceptible to technological changes, with capex cycles every 8-10 years. New technology in the telecom industry necessitates fresh investments or overhaul of existing networks. For instance, with the launch of 5G services, players were required to significantly invest in laying networks even after incurring significant capex for 4G networks just few years preceding that.
Intense competition in the retail sector RRVL faces competition from other organised retailers, some of whom have stores in catchment areas that overlap with its stores. Furthermore, with organised retail penetration in India being modest, players face intense competition from the unorganised sector, which operates in various addressable markets. However, India's unorganised retail sector is fragmented and plagued by operational inefficiency. Reliance Retail's New Commerce initiative connects millions of small kirana and merchants across India with suppliers, manufacturers, and brands. It enables businesses to become more efficient and offers them a compelling value proposition to grow their businesses and earnings and thus benefit all players in the retail value chain. The retail sector also remains susceptible to adverse macroeconomic environment and the emergence of quick commerce as a strong participant in the industry. Nonetheless, RRVL continues to expand quick hyper local deliveries registering strong growth in daily orders.
Long gestation and technology risk in new energy segment RIL is also making significant investments in building its new energy business, primarily in renewable energy. RIL has announced the setting up of Dhirubhai Ambani Green Energy Giga Complex over 5,000 acre in Jamnagar with giga factories for solar photo voltaic (PV) value chain, energy storage and green hydrogen, and has made technological acquisitions for the same as well. RIL also announced a long-term plan to establish and enable 100 gigawatt (GW) renewable energy generation capacity by 2030 and achieve the target of becoming net-zero carbon by 2035. RIL’s new energy segment remains exposed to technology and competitive risks as the RIL group is a relatively new entrant in the sector; however, its experience of timely and successful execution of large-scale and complex projects largely mitigates this risk. |
Liquidity Superior Liquidity should remain robust owing to the exceptional financial flexibility, given the company’s resource-raising ability from capital markets, and sizeable cash and liquid investments (Rs 229,685 crore as on September 30, 2025) at a consolidated level. Moreover, financial flexibility continues to be supported by sizeable bank lines, which usually remain moderately utilised. Cash accrual, and cash and equivalents should be adequate to meet maturing debt as well a portion of the capex requirement. Ample liquidity and strong cash flow from operations shall aid in meeting the capex requirement. |
ESG Profile Crisil Ratings believes RIL’s ESG profile supports its already strong credit risk profile. Oil to chemical segment contributes significantly to RIL’s business mix. This segment has a significant carbon footprint and has a material impact on the environment. Recognizing climate change as a global threat, RIL is developing solutions for decarbonisation and harnessing innovative technologies to combat it. RIL is investing in renewables and alternative energy to provide affordable green energy while prioritising the collective well-being of humanity.
Key ESG highlights:
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Outlook Stable Crisil Ratings believes RIL's credit risk profile will continue to be supported by the highly integrated operations in the core business of O2C, healthy profitability in its digital and retail businesses, and exceptional liquidity. |
Rating sensitivity factors Downward factors
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About the Company RIL is one of India's largest private sector companies, with diverse interests, including petrochemicals, oil refining, and upstream oil and gas exploration and production. RIL has strong competitiveness in the global oil refining and petrochemicals business, arising from its integrated business model with superior Complexity Index of 21.1 for its Jamnagar site, which makes it amongst the most complex sites in the world. RIL has also established its presence in the consumer facing business space by providing retail and digital services, which currently is RIL's principal growth driver. RRVL is India's largest retail entity by revenue, while RJIL has also become India's largest telecom service provider by revenue market share. The group is also in the process of establishing itself in the green energy space. |
Key Financial Indicators (Consolidated)
*Debt including deferred spectrum payments and lease liabilities # PAT margins is calculated on total income. |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
^ - Fund based facilities are fungible with non-fund based facilities Annexure - Details of Rating Withdrawn
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Annexure – List of entities consolidated
Source: RIL Results for quarter/ half year ended September 30, 2025. *Considered in line with Crisil Ratings analytical approach (not consolidated by RIL) #Merged with another subsidiary during the quarter ended September 30, 2025. $Ceased to be a subsidiary during the quarter ended September 30, 2025 |
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Criteria Details
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