Moody's has placed Reliance's "Ba2" rating on review for possible upgrade. The issue of family ownership and corporate governance would also be considered for the purpose.
The Moody's statement comes amidst reports that the process for a settlement on ownership issues on the basis of ICICI Bank chief and family friend K V Kamath's valuation report has begun.
"The rating action has been prompted by RIL's improving operational fundamentals, backed by its low cost positions and strong contributions from petrochemicals and refining," Moody's said in a release.
It said that RIL exhibits strong operations and financial metrics, which could support an investment grade profile.
However, whether such a level is achievable depends on our assessment of group's standards of corporate governance, management's growth strategy for its core business and affiliated investments, and the resultant expected financial profile and the business and financial risk profile of affiliated investments as well as the potential financial support required from RIL, it said.
With this review, Moody's would further assess the issue of legal subordination, given RIL has a substantial amount of secured debt on its balance sheet and would apply notching to its issuer and senior unsecured bond rating, when necessary, the agency said.
The company enjoys ongoing benefits from the robust demand for its petrochemical products, given economic growth and low consumption/capita in India and favourable trend for the industry over the next 12-18 months, it added.