Credit rating agency Moody's Investors Service on Friday assigned senior implied issuer ratings of Ba1 to India's Tata Power and Indian Oil Corp -- one notch above the sovereign rating it assigns to India.

Moody's also confirmed Tata Power's Ba2 foreign currency debt ratings, and Indian Oil's Ba2 issuer rating, concluding reviews initiated in November. The rating outlook for both firms is stable.

Moody's is currently reviewing India's Ba2 sovereign rating for a possible upgrade.

"The fundamental credit quality of IOC on a standalone basis, as indicated by its Ba1 senior implied rating, is better than that indicated by the Ba2 senior unsecured rating of the Republic of India," said Jeremy Haus, senior vice president at Moody's in London.

But he said factors specific to IOC meant its debt was unlikely to be rated above that of the sovereign.

In January 2002, financial services firm ICICI became the first Indian company assigned a rating by Moody's above that of the sovereign, following a change in policy by the rating agency in 2001.

The Ba1 senior and subordinated debt rating was transferred to ICICI Bank, India's second-largest commercial bank, which was formed by the merger of New York-listed ICICI with its subsidiary ICICI Bank last year.

Moody's senior implied issuer rating reflects its view of an issuer's ability to honor its financial obligations, and is assigned to an issuer as if it had a single class of debt and a single consolidated legal entity structure.

One of India's largest companies, Indian Oil Corp is an integrated downstream company, specialising in oil refining, marketing, distribution and retailing of petroleum products. It is 82 per cent owned by the Indian government.