Fitch Ratings on Thursday said it has upgraded Reliance Industries’ rating to ‘BBB+’ from ‘BBB’ as the company’s financial profile has improved following the sale of nearly a 25 per cent stake in Jio and a Rs 53,124-crore equity raise.

“Fitch Ratings has upgraded India-based RIL's long-term local-currency issuer default rating (IDR) to ‘BBB+’ from ‘BBB’. The Outlook is Stable,” the ratings agency said in a statement.

At the same time, the agency has affirmed RIL's long-term foreign-currency IDR at ‘BBB-’ with a stable outlook.

‘BBB’ ratings indicate that expectations of a default risk are currently low.

“The upgrade of the local-currency IDR is driven by our expectations of an improvement in RIL’s financial profile, with net debt reductions underpinned by proceeds from a stake sale in its subsidiary, Jio Platforms, and a rights issue, and our forecast of positive free cash flow (FCF) during the financial year ending March 2021,” it said.

Fitch forecast that RIL’s net debt/EBITDA will fall to 0.6x in 2020-21 from 2.3x in 2019-20.

“RIL’s local-currency IDR also reflects its strong business profile with a market leading position and diversified cash flows from a mix of oil to chemical and consumer businesses,” the statement said.

Fitch kept the stable outlook on RIL’s foreign-currency IDR despite the revision in Indian sovereign's rating outlook to ‘negative’ from ‘stable’ on June 18, as it expected the company’s hard currency external debt-service ratio to improve over the next 12 months.