Moody's Investors Service has affirmed Oil and Natural Gas Corporation (ONGC) Baa1 local currency issuer rating, Baa2 foreign currency issuer rating, and the Baa2 ratings on the senior unsecured bonds issued by ONGC Videsh Limited and guaranteed by ONGC. The outlook on all ratings is stable.

The research firm said, "ONGC's Baa1 rating local currency ratings is equivalent to its baseline credit assessment (BCA) of baa1. ONGC's Baa2 foreign currency ratings remains constrained by the ceiling for foreign currency bonds in India."

The rating actions follows the sharp reduction in Moody's oil price assumptions in light of continuing oversupply in the global oil markets. Moody's now assumes the Brent crude, the international benchmark, to average USD 43 per barrel and US$ 48 per barrel in 2016 and 2017 respectively. This marks a USD 10 per barrel and USD 12 per barrel reduction from its previous assumptions for 2016 and 2017 respectively.

Vikas Halan, a Moody's vice president and senior credit officer said "The affirmation of ONGC's rating, despite lower oil price assumptions, reflects the reduction in fuel subsidy burdens that partly offsets the impact of low oil prices resulting in a much lower decline in net realized prices of oil for the companies."

Shares of the company gained Rs 8.7, or 3.99%, to trade at Rs 226.55. The total volume of shares traded was 564,638 at the BSE (3.45 p.m., Wednesday).