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Fitch Ratings, a company that assesses the financial health of businesses, has given a stamp of approval to India's Oil and Natural Gas Corporation Limited (ONGC) by keeping its rating at 'BBB-' (Stable Outlook). This rating shows that ONGC is considered to have a moderate level of creditworthiness. Additionally, Fitch has said that the future outlook for ONGC is stable.

Maintaining ONGC's Standalone Credit Profile (SCP) at 'bbb+', Fitch recognises the company's status as India's largest oil and gas producer, boasting significant reserves, substantial production output, and a geographically diversified business model.

"We maintain ONGC's Standalone Credit Profile (SCP) at 'bbb+', which reflects ONGC's scale as the largest oil and gas (O&G) producer in India, its significant reserves and production, and its vertically integrated and geographically diversified business model, which are comparable with that of peers rated in the 'A' category by Fitch," it said in a statement.

ONGC received its rating based on a variety of factors, one of which is closely tied to the financial standing of the Indian government. Fitch's assessment takes into account the role ONGC plays in the nation's energy security and its strategic importance, which is supported by the Indian government's majority ownership.

Additionally, its rating is affected by the Indian government's rating, which is 'BBB-', too. This means that ONGC's rating is connected to how well the country's government is doing financially.

Fitch believes that the Indian government would support ONGC if it faced any financial problems because ONGC is important for India's energy needs.

Fitch also mentioned that ONGC is also trying to reduce its impact on the environment by investing in cleaner energy sources.

However, the rating also takes into account some challenges ONGC faces, like its oil and gas production declining in the past. Fitch believes this will get better over the next few years.

"The SCP also considers Fitch's expectations that ONGC's credit metrics will improve over the financial years ending March 2024 (FY24) to FY27. ONGC's credit strength, however, is counterbalanced by its long track record of declining domestic oil and gas production, which we expect to reverse over the next few years, though there is less certainty on its ability to sustain organic production growth through the cycle in the longer term," it added.