Fitch Ratings has affirmed the Long-Term Foreign-Currency Issuer Default Rating (IDR) of Oil India Limited at ‘BBB-‘ with a Stable Outlook, citing strong government support and the company’s strategic importance in India’s energy sector.
“Fitch Ratings has affirmed Oil India Limited’s (OIL) Long-Term Foreign-Currency Issuer Default Rating (IDR)... at ‘BBB-‘... The Outlook on the IDRs is Stable,” the agency said in its latest report.
The rating agency said the company’s rating is closely linked to India’s sovereign rating, as it expects strong backing from the government. “OIL’s IDR is equalised with the Indian sovereign rating... based on our ‘Very Likely’ assessment of support from the government,” Fitch noted.
Highlighting the government’s role, Fitch said the Centre has significant control over the company. “The state directly owns 57% of the company and exerts control via appointments of its chairman, managing director, board representatives and independent directors,” it added.
Strategic role in energy security
Fitch also underscored Oil India’s importance in ensuring energy security. “Energy security is a key government priority, and OIL is the largest oil and gas producer and refiner in northeastern India... and contributes 10% to India’s overall oil and gas production,” the report said.
Operational outlook and growth expectations
On the operational front, the agency expects improvement in upstream performance. “Fitch expects OIL’s upstream EBITDA to rise by around 25% in FY27... production grows by 3% - 6%, and crude oil prices remain steady,” it said.
However, the report flagged near-term pressure on earnings due to higher investments.
“We maintain OIL’s Standalone Credit Profile (SCP) at ‘bb+’... driven by its cost-competitive upstream operations... balanced by its geographical concentration,” Fitch said, adding that leverage is expected to rise due to “high capex intensity” and increased exploration costs.
Fitch further noted that the company’s debt levels are likely to increase in the coming years. “We expect leverage to remain around 2.7x-2.8x... as crude oil prices fall while EBITDA contribution from subsidiary... picks up,” it said.
Refining margins and global risks
On the refining side, the agency expects margins to remain strong in the near term. “Fitch expects gross refining margins... to stay above mid-cycle levels in FY27, aided by supply disruptions... since the Iran conflict began,” the report said.
At the same time, Fitch cautioned about potential risks from global developments. “A prolonged war could raise risks of regulation that curtail the sector’s profits,” it said, even as higher crude prices may support earnings.
Liquidity remains strong
The agency also highlighted the company’s strong liquidity position. “OIL’s liquidity is strong, with estimated readily available cash... more than adequate to cover... current debt maturities,” it added.
Overall, Fitch said the rating reflects a balance between Oil India’s stable operating profile and rising financial commitments, with continued government support acting as a key credit strength.
Published on April 27, 2026