THE CREDIT Rating Information Services of India (Crisil)has assigned a P1 plus (P one plus) rating to the Rs. 10 billion short-term debt programme of Hindustan Petroleum Corporation (enhanced from Rs. 7.5 billion). The `AAA' (triple A) rating assigned to the Rs. 7.5 billion and Rs. 5 billion non convertible debenture programme, `FAAA' (F Triple A) rating assigned to the fixed deposit programme of the company have been reaffirmed.

The rating reflects the company's strength as an integrated oil company in the downstream sector with a mix of depreciated and new refinery assets, established distribution network, favourable operating performance and strong financial position as manifested in its low gearing levels and strong cash accruals. These strengths offset the expected increase in competition on account of deregulation, burgeoning oil pool deficit, which is straining the short term liquidity position of oil companies' and the cyclical nature of refinery margins.

Hindustan Petroleum Corporation Limited (HPCL) is one of the three integrated downstream oil companies in the country involved in both refining and marketing operations. HPCL has two refineries at Mumbai and Vizag with 5.5 mtpa and 7.5 mtpa capacities respectively. The company is also a co-promoter of Mangalore Refinery and Petrochemicals (MRPL), which owns 9 mtpa refinery capacity at Mangalore.

At present, HPCL has around 20 per cent share of Indian petroleum market and its marketing and distribution infrastructure is spread all over the country. HPCL's product pipeline infrastructure comprises Mumbai-Pune pipeline and the recently commissioned Vizag-Vijayawada pipeline.