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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Non Convertible Debentures (NCD) | 2000.00 | ACUITE AA | Stable | Reaffirmed | - |
| Total Outstanding | 2000.00 | - | - |
| Total Withdrawn | 0.00 | - | - |
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Rating Rationale |
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Acuité has reaffirmed the long-term rating of ‘ACUITE AA’ (read as ACUITE double A) on the Rs.2000.00 Cr. Non-Convertible Debentures (NCD) of Gujarat State Investments Limited (GSIL). The outlook is ‘Stable’.
Rationale for rating The rating reaffirmation is driven by the strong parentage and strategic importance of GSIL to Government of Gujarat (GoG) indicated by timely support received by GoG in the form of revenue grants for servicing its coupon payment and sale of its investment to GoG towards redemption of NCDs. Further, the rating draws comfort from investment by GSIL in key state companies wherein it acts as a funding vehicle to the government commitments. However, the rating remains susceptible to any changes in the fiscal policy and credit rating profile of GoG. |
| About the Company |
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Incorporated on January 29,1988, Gujarat State Investments Limited (GSIL) is a wholly owned subsidiary of Government of Gujarat (GoG). It is registered with RBI as a Core Investment Company (CIC) and acts as the investment arm of GoG which holds both quoted and unquoted investments. The company is managed by a board, which comprises senior bureaucrats from GoG. Presently, Dr. T. Natrajan, IAS is the chairman and Mr. Sandeep Kumar IAS is the managing director.
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| Unsupported Rating |
| Not applicable. |
| Analytical Approach |
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Acuité has considered the standalone financial and business risk profile of GSIL along with the parentage and strong support it receives from GoG through state budgetary grants for servicing of the NCDs.
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| Key Rating Drivers |
| Strengths |
| Strong support from GoG for servicing of NCDs
As per the Financial Realignment Plan of Gujarat State Petroleum Corporation Limited (GSPC) which was approved by GoG and GSPC via Government Resolution (GR) dated 26 July, 2018 and the latter’s board resolution dated 31 July, 2018 respectively, NCDs amounting to Rs.6000 Cr. were transferred to GSIL (Rs.2000 Cr. outstanding as of March 31, 2026). Further, as per the GR, GoG supports GSIL for payment towards interest and principal repayment on the NCDs and necessary budgetary provision in the state budget for meeting these requirements are made by the Department of Energy & Petrochemicals every year. The redemption of NCDs is catered through the sale of investments to GoG. Therefore, the rating factors in this strong and direct support from the state government which is expected to continue till the debt tenure and is a key rating sensitivity. Investment in key state companies GSIL, wholly owned by GoG, is a holding company for various investments of state government. The company is registered as a CIC by Reserve Bank of India (RBI). It has investments in key listed state PSUs like Gujarat Narmada Valley Fertilizers Company Limited (GNFC), Gujarat Alkalies & Chemicals Limited (GACL), and Gujarat State Fertilizers & Chemicals Company Limited (GSFC), Gujarat State Petroleum Corporation Limited (GSPC), etc. GSIL had an investment portfolio of Rs.6,264.23 Cr. (book value) as on 31st March, 2025. Being a registered CIC, GSIL’s revenue is highly dependent on the performance of the companies wherein it has invested. The revenue stream of GSIL is by way of dividends or interest received from the invested companies. GSIL has earned dividends and interest income worth Rs.144.23 Cr. in FY25 against Rs.297.75 Cr. in FY24. Further, it is estimated to have received dividend income of ~Rs.156 Cr. and interest income of ~Rs.8 Cr in FY26. Acuité believes that GSIL is of strategic importance to GoG given its investment portfolio of PSUs and its status as a funding vehicle for various investments and commitments of the state government. Healthy fiscal profile of GoG Gujarat has one of the strongest fiscal profiles among the states of India. It has demonstrated a strong ability to attract investments from foreign as well as domestic companies. This growth has been supported by agricultural growth which is supported by crops such as cotton, and oilseeds, among others. Gujarat state’s GSDP for 2026-27 is projected to be Rs.33,24,676 Cr. which nearly accounts for ~8.6-9 per cent of the nation’s GDP. The revenue surplus is expected at Rs.25,587 Cr. in FY2026-27 (BE) as against Rs.23,725 Cr. in FY2025-26 (RE). The Debt to GSDP for the state is expected at 14.7 per cent for FY2026-27 (BE) vis-à-vis 14.4 per cent for FY2025-26 (RE). Gujarat is also one of the states which has shown significant progress in power sector reforms and has reduced the commercial losses in the power sector, thereby lowering the fiscal burden on the state. |
| Weaknesses |
| Susceptibility to changes in the fiscal profile of Gujarat
GSIL’s rating is driven by continued support from GoG, hence, the fiscal profile of the state is a key rating sensitivity factor. Any significant changes in the rating of GoG due to factors such as prolonged slowdown in industrial activities or challenges faced by the state in attracting investment due to factors such as socio-economic changes or other such events can have an impact in its fiscal indicators. The influence of adverse macro-economic factors such as cutbacks in capex plans by corporates, hardening of interest rates may impinge on the investment flows into the state in the near term thereby increasing the pressure on the Government to step up its expenditure plans. This in turn could impact its future fiscal profile & hence influence the rating on the instruments like GSIL’s NCDs. Further, timely budget allocation and timely receipt of grants from GoG for servicing the coupon and sale of investments to GoG towards redemption of the NCDs is another rating sensitivity factor. |
| Assessment of Adequacy of Credit Enhancement under various scenarios including stress scenarios (applicable for ratings factoring specified support considerations with or without the “CE” suffix) |
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Support from GoG
GSIL is the investment arm of GoG and is registered with RBI as a Core Investment Company (CIC). As per the Government Resolution (GR), GoG support GSIL for payment towards interest and principal repayment on the NCDs and necessary budgetary provision in the state budget. These requirements are made by the Department of Energy & Petrochemicals every year. As on maturity of NCD, GSIL sales back its investments to GoG and redeems its maturing NCD from the proceeds. Stress case Scenario Acuité believes that the strong parentage and financial support from GoG shall enable GSIL to meet its debt obligations even in stress scenarios. |
Rating Sensitivities
| Potential triggers (individual or collective) for an upward rating action: |
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| Potential triggers (individual or collective) for a downward rating action: |
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| All Covenants |
| The issuer has confirmed in writing there are no covenants. |
| Liquidity Position |
| Adequate |
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The liquidity is supported by dividend and interest income from investments, grants from GoG for debt servicing and proceeds from sale of investments to GoG for NCD redemption. GSIL is estimated to have received revenue grants of Rs.180.60 Cr during FY26 for timely servicing of coupon payments. Further, balance NCDs of Rs.2,000 Cr are due for redemption in March, 2028; which shall be paid off through sale of investments to GoG.
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| Outlook: Stable |
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| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 25 (Actual) | FY 24 (Actual) |
| Operating Income | Rs. Cr. | 144.23 | 297.75 |
| PAT | Rs. Cr. | 125.29 | 410.21 |
| PAT Margin | (%) | 86.87 | 137.77 |
| Total Debt/Tangible Net Worth | Times | 0.56 | 0.91 |
| PBDIT/Interest | Times | 1.48 | 2.55 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not applicable. |
| Any other information |
| None. |
| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Banks And Financial Institutions: https://www.acuite.in/view-rating-criteria-45.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Group And Parent Support: https://www.acuite.in/view-rating-criteria-47.htm • State Government Ratings : https://www.acuite.in/view-rating-criteria-26.htm |
| Note on complexity levels of the rated instrument |
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*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||
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Contacts |
List of instruments and names of regulators of the instruments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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As required by SEBI Circular (SEBI/HO/DDHS/DDHS-PoD-2/I/4685/2026) dated February 10, 2026, a list of activities or instruments falling under the purview of various Financial Sector Regulators (FSRs), along with the names of respective FSRs, is being disclosed below:
A. Rating Activity:
1 Includes securitisation transactions involving assignee payout, acquirer's payout.
2 Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions.
3 There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs. 4 The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In Press Release(s) subsequent to issuance(s), Acuite shall separately capture the rated quantum details along with names of respective regulators. 5 These ratings were assigned during regulatory regime prior to the introduction of SEBI CRA Circular dated Feb 10, 2026 and accordingly, investor side regulators have been included.
B. Other activities:
6 permitted by SEBI vide SEBI Master Circular for CRAs.
Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available. Disclosure on instruments / activities and names of regulators: A list of products/activities or ratings of instruments falling under the purview of various financial sector regulators (FSRs) along with the names of respective FSRs has also been duly disclosed by Acuite on its website. A link to the same has been provided below for ready reference:
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About Acuité Ratings & Research |
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