Fitch Ratings has assigned India-based Oil India a long-term foreign-currency issuer default rating (IDR) at 'BBB-'. The outlook is stable. The senior unsecured debt rating is also 'BBB-'.

Fitch assesses the linkages between OIL and its 68.4% owner-the Indian sovereign ('BBB-'/Stable)-to be strong, based on the agency’s Parent and Subsidiary Linkage methodology, especially its strategic and operational linkages.

Currently, OIL's standalone rating is at the same level as the sovereign's. Should the standalone rating be revised down to below that of the sovereign, OIL's IDR would receive an uplift to equate it to India's rating based on a top-down rating approach.

OIL has strong operating experience of around 50 years. The rating benefits from OIL's low cost ratios, especially its very low finding and development costs of USD 5.4 a barrel. The company's production cost of around USD 8.5 per barrel (excluding levies) is in line with rating peers, although this is expected to increase over the medium-term. OIL has a healthy reserve replacement ratio of above 150%, largely organic.

Shares of the company gained Rs 10.85, or 2.39%, to settle at Rs 464.15. The total volume of shares traded was 26,678 at the BSE (Wednesday).