S&P Global Ratings Places Six Tata Group Firms On Credit Watch With 'Positive' Outlook

S&P Global Ratings has placed six Tata Group entities on credit watch with positive implications, indicating a potential increase in group support. The companies include Tata Steel Ltd., Tata Motors Ltd., Jaguar Land Rover Automotive Plc (JLR), Tata Power Co., TML Holdings Pte., and ABJA Investment Co., according to a statement from the agency.

The rating actions came ahead of a review of the relationship between the group's holding company, Tata Sons Pte. (unrated), and its subsidiaries, it added.

The agency said its review will assess whether the potential of extraordinary support for the group entities from Tata Sons is greater than what it previously factored.

"This is due to increasing operational and management linkages within the group," the rating agency said, adding that Tata Sons has a record of supporting group entities in events of stress.

The group provided material extraordinary financial support to entities such as Tata Teleservices Ltd. and Coastal Gujarat Power Ltd., an erstwhile subsidiary of Tata Power, which has now been merged with it, it said.

"We are also undertaking the review because we believe operational integration between Tata Sons and group entities, as well as between group entities, will continue to increase," it said.

Tata Sons has a clear imprint on the group's financial strategy, in line with a group-wide focus on managing leverage, S&P Global Ratings said. The "review will also consider Tata Sons' improving flexibility to provide support and the group's more balanced cash flow generation".

(With inputs from PTI)