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Global rating agency Fitch today said the rupee depreciation will have highest impact on state-owned oil marketing companies, including Indian Oil Corp (IOC) and Bharat Petroleum Corporation Ltd (BPCL).
"The risks to standalone financial profiles are highest for state-controlled petroleum marketing companies among the Indian energy sector issuers currently rated by Fitch," it said in a statement.
The Indian rupee has depreciated by over 27 per cent against the dollar since April 30 (53.80). It closed at a record low of 68.80 yesterday after touching 68.85.
Fitch expects limited negative credit implications for most of the rated issuers due to natural or financial hedges or, in the case of utilities, tariff mechanisms that allow for exchange rate fluctuations.
The rated oil and gas companies, Fitch said, have a significant proportion of foreign currency-denominated debt.
The majority-state owned oil refining and marketing companies - Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL) - had over 50 per cent of their total debt in foreign currencies in 2012-13 fiscal.
Fitch said regular increases in the price of diesel have reduced the under-recoveries, and hence the subsidy requirement, however, the rupee depreciation will reverse this trend.
"While further price increases for diesel are being considered to reduce the subsidy requirement, the quantum of such price increases remains challenged by pressures on consumer inflation and political dynamics in India," it said.