Press Release ONGC Petro-additions Limited

1 1 CARE Ratings Limited Press Release ONGC Petro-additions Limited March 22, 2018 Ratings Instrument Amount (Rs. crore) Rating1 Rating Action Proposed Long term Instrument issue (CCD-2) 492 (Rs. Four Hundred and Ninety two crore only) Provisional CARE AAA(SO)*; Stable [Provisional Triple A (Structured Obligation); Outlook: Stable] Assigned Details of instruments/facilities in Annexure-1 *The rating is Provisional and shall be confirmed upon the execution of documents (including signed term sheet, debenture trust deed etc.) by ONGC Petro-additions Limited . Detailed Rationale & Key Rating Drivers The rating assigned to the long-term Compulsorily Convertible Debenture (CCD) of ONGC Petro-additions Limited (OPAL) is based on the credit enhancement in the form of irrevocable and unconditional undertaking from Oil and Natural Gas Corporation Ltd (ONGC; rated CARE AAA; Stable/A1+) to purchase the said CCDs from the Investors on exercise of put-option and to fund the service account for coupon payment on or before coupon payment date.

2 Further, the rating of CCD-2 is provisional and will be confirmed on execution of final transaction documents (including term sheet, information memorandum, trust deed, etc.) to the satisfaction of CARE. The ability of the company to maintain its production levels and replace diminishing reserves, timely completion of envisaged projects, along with the future movement of global crude prices shall be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Strengths Strong Parentage of ONGC ONGC holds of holding in OPAL and the senior officials from ONGC are part of the board of directors or management of the company. Put option and undertaking provided by ONGC The CCD s are backed by the unconditional and irrevocable put option from ONGC for buying the CCDs from the investors, and also an undertaking from ONGC for meeting the coupon payment on the instrument Analytical approach: Standalone with the unconditional and irrevocable put option and undertaking from ONGC that covers all the repayment obligations to the CCD holders.

3 Applicable Criteria Criteria on assigning Outlook to Credit Ratings CARE s Policy on Default Recognition CARE s methodology for manufacturing companies CARE s methodology for financial ratios (Non-Financial Sector) About the Company OPAL OPAL (CIN: U23209GJ2006 PLC060282) was incorporated on November 15, 2006 for implementing a greenfield million metric tonnes per annum (MMTPA) petrochemicals complex in SEZ at Dahej, Gujarat (the Project). OPAL is promoted by two Maharatna PSUs viz. ONGC (held 26% equity capital as on March 31, 2017) and GAIL ( ). The Project comprises 1 Complete definitions of the ratings assigned are available at and in other CARE publications. 2 CARE Ratings Limited Press Release of a dual feed-cracker with capacity to produce MMTPA of Ethylene and MMTPA of Propylene as petrochemical feedstock to downstream polymer units in the Dahej SEZ.

4 ONGC ONGC (CIN No L74899DL1993 GOI054155) is a Maharatna PSU, with the GoI holdings of stake in the company as on December 31, 2017. ONGC is India s largest E&P player and is present across the hydrocarbon value chain. The company undertakes exploration and production activities in 17 other countries through its wholly-owned subsidiary ONGC Videsh Limited (OVL). Also, it has integrated downstream activities in India with equity stake as on March 31, 2017 in Mangalore Refinery and Petrochemicals Ltd (MRPL) s million tonnes per annum (MMTPA) refinery and planning to acquire per cent stake in HPCL. Another joint venture ONGC Petro-additions Ltd in which ONGC owns 26% equity capital [rated CARE AAA (SO)] is developing a mega Petrochemical project at Dahej which is at near completion stage.

5 During FY17 (Audited; refers to the period April 1 to March 31), ONGC earned PAT of , 900 crore (PY: , 140 crore) on operating income of , 784 crore (PY: Rs. 78,759 crore). As per unaudited results for 9 MFY18 (refers to the period April 1 to December 31), the company achieved operating income of , 034 crore (PY: , 194 crore) and PAT of , 030 crore (PY: , 560 crore). Brief Financials (Rs. crore) FY16 (A) FY17 (A) Total operating income (Including interest on deposits) 78,759 78,784 PBILDT 33,258 31,955 PAT 16,140 17,900 Overall gearing (times) - - Interest coverage (times) A: Audited Status of non-cooperation with previous CRA: NA Any other information: NA Rating History for last three years: Please refer Annexure-2 Note on complexity levels of the rated instrument: CARE has classified instruments rated by it on the basis of complexity.

6 This classification is available at Investors/market intermediaries/regulators or others are welcome to write to for any clarifications. Analyst Contact: Name: Mr Manek Narang Tel: 011-45333233 Mobile: 9810516225 Email: **For detailed Rationale Report and subscription information, please contact us at About CARE Ratings: CARE Ratings commenced operations in April 1993 and over two decades, it has established itself as one of the leading credit rating agencies in India. CARE is registered with the Securities and Exchange Board of India (SEBI) and also recognized as an External Credit Assessment Institution (ECAI) by the Reserve Bank of India (RBI). CARE Ratings is proud of its rightful place in the Indian capital market built around investor confidence.

7 CARE Ratings provides the entire spectrum of credit rating that helps the corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations. Our rating and grading service offerings leverage our domain and analytical expertise backed by the methodologies congruent with the international best practices. 3 CARE Ratings Limited Press Release Disclaimer CARE s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings/outlooks on information obtained from sources believed by it to be accurate and reliable.

8 CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. In case of partnership/proprietary concerns, the rating /outlook assigned by CARE is based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating/outlook may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors.

9 Annexure-1: Details of Instruments/Facilities Name of the Instrument Date of Issuance Coupon Rate Maturity Date Size of the Issue (Rs. crore) Rating assigned along with Rating Outlook Debentures-Compulsorily Convertible Debentures - - - Provisional CARE AAA (SO); Stable Annexure-2: Rating History of last three years Sr. No. Name of the Instrument/Bank Facilities Current Ratings Rating history Type Amount Outstanding (Rs. crore) Rating Date(s) & Rating(s) assigned in 2017-2018 Date(s) & Rating(s) assigned in 2016-2017 Date(s) & Rating(s) assigned in 2015-2016 Date(s) & Rating(s) assigned in 2014-2015 1. Debentures-Compulsorily Convertible Debentures LT CARE AAA (SO); Stable 1)CARE AAA (SO); Stable (06-Dec-17) 1)CARE AAA (SO) (18-Oct-16) 2)CARE AAA (SO) (19-Jul-16) 3)Provisional CARE AAA (SO) (12-May-16) - - 2.

10 Debentures-Compulsorily Convertible Debentures LT Provisional CARE AAA (SO); Stable - - - - 4 CARE Ratings Limited Press Release CONTACT Head Office Mumbai Ms. Meenal Sikchi Mr. Ankur Sachdeva Cell: + 91 98190 09839 Cell: + 91 98196 98985 E-mail: E-mail: Ms. Rashmi Narvankar Mr. Saikat Roy Cell: + 91 99675 70636 Cell: + 91 98209 98779 E-mail: E-mail: CARE Ratings Limited (Formerly known as Credit Analysis & Research Ltd.) Corporate Office: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022 Tel: +91-22-6754 3456 | Fax: +91-22-6754 3457 | E-mail: AHMEDABAD Mr. Deepak Prajapati 32, Titanium, Prahaladnagar Corporate Road, Satellite, Ahmedabad - 380 015 Cell: +91-9099028864 Tel: +91-79-4026 5656 E-mail: BENGALURU Mr.