India Ratings and Research (Ind-Ra) has affirmed GAIL (India) (GAIL) long-term issuer rating at 'AAA'. The outlook is stable. The company's capacity expansion at its petrochemical plant in Pata was completed in FY15 and Brahmaputra Crackers and Polymer project will be completed by FYE16. Also, GAIL has slowed down its capex on pipelines network expansion, driven by lower capacity utilisation. In FY16, GAIL plans to incur Rs 24.4 billion with Rs 13 billion towards pipelines and Rs 6.4 billion towards petrochemicals and Rs 5 billion for others.

GAIL's cash flow from operations has been strong, driven by stable profitability, resulting from diversified business segments. The company also maintained a low net working capital cycle of 10-12 days over FY12-FY14, riding on credible and financially strong counterparties.

GAIL's subsidy burden declined to Rs 10 billion in FY15 from Rs 31.8 billion in FY12. Ind-Ra expects GAIL's subsidy share to decline further to Rs 5 billion in FY16 and FY17, driven by the benign crude prices. This is likely to result in increased top-line for the liquid hydrocarbon (LHC) segment. A higher-than-expected subsidy burden would lower the available cash flow for GAIL.

Shares of the company declined Rs 11.75, or 3.06%, to settle at Rs 372.55. The total volume of shares traded was 68,423 at the BSE (Wednesday).