India’s CARE Ratings on Monday said it has put Nayara Energy’s long term bank facilities under ‘credit watch with negative implications’ due to sanctions against Russia for its invasion of Ukraine.

Russian energy major Rosneft owns a 49.13% stake in Nayara while a similar-sized holding is shared by global commodities trading house Trafigura and Cyprus-based Russian investment group United Capital Partners.

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CARE has put the ratings of Nayara’s long term bank loan of 171.5 billion rupees ($2.23 billion) and non-convertible debentures of 25.42 billion rupees under credit watch with negative implications, it said in a statement. Both the bank facilities have been assigned the CARE AA.

Nayara operates the 400,000 barrel-per-day (BPD) Vadinar refinery in Gujarat. It has a fleet of around 6,500 retail fuel stations in the country.

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The rating agency said it will continue to monitor the situation and would take action on the rating in case of any adverse impact of the war on Nayara’s shareholders and the Indian company.

However, it said Nayara is not at present impacted by western sanctions against Russia as it does not have any major operational dependence on Russia or any of the Russian entities. It buys oil from producers in the Middle East, Egypt and Latin America and exports most of its refined fuels to the Netherlands and the Far East.

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The ratings assigned to the bank facilities and debt instruments of Nayara Energy Limited continue to derive strength from the strong operating profile of the company as it operates India’s second-largest single-location refinery with high Nelson Complexity Index (NCI), the strategic location of its refinery along with captive port terminal and power plant, healthy throughput levels, the company said in a statement.

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“Nonetheless, given the severity of the war situation and the resultant global backlash by way of sanctions on Russia and certain Russian entities, there is a lot of uncertainty over the exact ramifications of the situation on Nayara’s shareholders,” it said.

The rating agency also said that any adverse impact of the geopolitical situation on the operations of the company or its shareholders may lead to a negative rating for the company.