The company stated that this rating upgrade represents a significant improvement of three notches in the company’s credit profile, achieved after six years at the IND D rating level.
The upgrade also reflects the company’s substantial deleveraging efforts, resulting in net zero debt with banks and financial institutions.
India Ratings and Research stated that the upgrade reflects Reliance Infra’s timely servicing of standalone debt obligations for three consecutive months ended 30 June 2025.
Regarding the guaranteed debt, the company has executed one-time settlement agreements with the lenders of its subsidiaries. These repayments were facilitated by a significant long-term capital infusion through the issuance of warrants amounting to Rs 3,010 crore, of which Rs 750 crore was received in FY25 and Rs 225 crore in 1QFY26, which have eased liquidity pressures, boosting Reliance Infra’s credit profile.
However, the ratings continue to be constrained by the company’s weak financial risk profile and its exposure to risks arising from the ongoing arbitration proceedings, and large payables and contingent liabilities involving both standalone and financially stressed subsidiaries, which remain key monitorable.
Nevertheless, the ratings are supported by the substantial deleveraging of the standalone balance sheet, improved revenue visibility from the engineering and construction (E&C) segment, and the company’s long-standing presence and experience in the infrastructure sector.
The company’s E&C business is likely to turnaround in FY26, driven by management’s expected order flows in new age business.
Moreover, the company issued Rs 3,010 crore of warrants in October 2024 and has board-approved plans to raise Rs 3,000 crore through long-tenored foreign currency convertible bonds (FCCBs) and another Rs 3,000 crorethrough qualified institutional placement (QIP) of equity.
The agency further said that s sustained improvement in the liquidity, along with the material resolution of ongoing arbitrations and a visible recovery in revenue and profitability, with a significant improvement in credit metrics on sustained basis, will be positive from the ratings.
However, any reduction or material delay in the planned fund infusion, or crystallisation of significant claims or arbitration outcomes that adversely impact the liquidity, will be negative from the ratings.
Reliance Infra, a part of the Reliance Group, stands as one of India’s foremost infrastructure conglomerates. The company operates through a diversified network of special purpose vehicles (SPVs) across critical growth sectors such as power, roads, metro rail, airports, and defence. It also provides E&C services and delivers turnkey solutions across power, transportation, and infrastructure projects.