Gujarat Energy Limited's Long-term Bank Facilities Reaffirmed CARE AAA; Stable
Gujarat Energy Limited's long-term bank facilities of ₹12,836 crore have been reaffirmed at CARE AAA; Stable by CARE Ratings. The company has transformed into an integrated energy player following a merger and demerger effective May 01, 2026. Despite a ~15% revenue de-growth in FY26 to ₹23,614 crore, GEL maintained a PBILDT margin of 13.07% and a negative net debt position as of March 31, 2026.
A reaffirmation of the highest credit rating has a significant positive impact on a company's ability to access debt financing at favorable terms, investor confidence, and overall market perception.
The credit rating has been reaffirmed at the highest level (CARE AAA; Stable) for a significant facility size, indicating strong financial health and business prospects. The report highlights the company's integrated business model, robust financial position with negative net debt, and stable outlook.
CARE Ratings Limited has reaffirmed the long-term and short-term bank facilities of Gujarat Energy Limited (GEL), formerly Gujarat Gas Limited (GGL), at CARE AAA; Stable / CARE A1+. The total enhanced facility size is ₹12,836 crore.
The reaffirmation reflects GEL's strong business risk profile and its evolution into an integrated energy company with a presence across the natural gas value chain, including CGD, gas trading, power generation, exploration and production (E&P), and regasification. This transformation follows a composite scheme of merger and demerger, effective May 01, 2026, which amalgamated Gujarat State Petroleum Corporation (GSPC), Gujarat State Petronet Limited (GSPL), and GSPC Energy Limited (GSENLI) with GGL, and demerged the gas transmission business into GSPL Transmission Limited (GTL). Post-scheme, the company was renamed Gujarat Energy Limited.
Ratings are supported by GEL's dominant position in gas trading and CGD, large scale of operations, and the favourable outlook for natural gas as a cleaner fuel. The company also benefits from diversified gas sourcing and a moderately diversified customer base. In FY26, despite a moderation in sales volumes (CGD sales volumes declined by ~10% to 8.69 MMSCMD and gas trading volumes by ~19% to 10.19 MMSCMD), the company maintained satisfactory financial performance with a PBILDT margin of 13.07%. The net worth base strengthened due to the merger, and the financial position remains robust with a negative net debt position as of March 31, 2026 (total debt of ₹3,243 crore against cash and bank balances of ₹6,393 crore).
Planned annual capital expenditure of ~₹1,000-1,100 crore is expected to be funded through internal accruals and liquidity, maintaining a negative net debt position. The company is exposed to risks from gas price volatility, sourcing challenges, and regulatory changes, particularly concerning the ability to pass on increased gas procurement costs to consumers. The rating also factors in geopolitical disruptions in West Asia affecting RLNG supplies and increased demand for industrial PNG from the Morbi region due to propane availability issues.
The stable outlook is based on CARE Ratings' expectation that GEL will maintain its strong market position, steady operational performance, and robust financial position.
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GUJARAT ENERGY LIMITED filed this with the NSE as a statutory disclosure, categorised under credit ratings. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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