Anil Ambani-led Reliance Infrastructure has received three-notch rating ‘IND B/Stable’ from India Ratings and Research upgrading. The three-notch upgrade reflects a significant improvement in the company’s financial health following aggressive debt reduction efforts.
This marks a key turnaround for Reliance Infrastructure, which was stuck at the default (IND D) rating for six years.
Credit profile improves after debt clean-up
The new rating applies to the company’s non-fund-based working capital limits, which stand at Rs 1,860.23 crore. India Ratings also withdrew ratings on some proposed fund-based limits, which the company did not utilise.
The improvement followed the company achieving near-zero debt on a standalone basis and settling legacy dues of its subsidiaries.
“The upgrade reflects Reliance Infra’s timely servicing of standalone debt obligations for three consecutive months ending June 30, 2025,” India Ratings said in its rationale.
Reliance Infra clears over Rs 3,000 crore debt
The company undertook major deleveraging steps in FY25, including issuing warrants worth Rs 30.1 billion. Of this, Rs 7.5 billion was received in FY25 and another Rs 2.25 billion in Q1FY26. This helped Reliance Infra slash its standalone debt to Rs 470 crore as of March 2025, down from over Rs 3,060 crore a year ago.
Reliance Infra also settled outstanding obligations with lenders of key subsidiaries, including JR Toll Road Private Ltd and Cosmea Business Acquisition Pvt Ltd.
Rs 12.5 billion legal battle with Shanghai Electric continues
Despite the positive rating action, the outlook remains cautious due to the company’s weak financial risk profile, ongoing arbitration proceedings, and exposure to stressed group entities.
The company is still grappling with contingent liabilities and legal claims, including a Rs 12.5 billion arbitration dispute with Shanghai Electric. Nevertheless, India Ratings believes the improved revenue visibility from its engineering and construction (E&C) segment and the capital infusion plan will support its liquidity in the near term.
Reliance Infra’s board has also approved plans to raise another Rs 60 billion through foreign currency convertible bonds (FCCBs) and a qualified institutional placement (QIP) of equity.
Business expansion and dispute resolution on watchlist
The company’s ability to sustain its improved liquidity, resolve pending legal disputes, and secure new business orders will be key to any further rating upgrade.
Reliance Infrastructure, part of the Anil Ambani-led Reliance Group, operates in sectors including roads, metro rail, defence, and engineering services. It also holds a 24.9 per cent stake in Reliance Power.