S&P upgrades credit rating of 5 Tata Group cos

New Delhi: S&P Global Ratings, a credit rating company, on Thursday upgraded ratings of five companies of the Tata group including Tata Steel, Tata Motors and Jaguar Land Rover (JLR) reflecting its reassessment of the ongoing influence and the potential for 'extraordinary financial support' from the parent, Tata Sons. Under the revised exercise, S&P Global said ratings on Tata Steel Ltd and its 100 per centowned financing subsidiary ABJA Investment Co Pvt Ltd have been upgraded to 'BBB' from 'BB' with stable outlook. Similarly, Tata Motors Ltd and its whollyowned arm TML Holdings Pvt Ltd have been upgraded to 'BB' from 'B' ratings with stable outlook. Also, the ratings of the group's British luxury vehicles maker Jaguar Land Rover Automotive PLC (JLR) has been revised upwards to 'B+' from 'B'. The outlook is stable, S&P Global Ratings said in a statement.

The upgradation on the Tata Group entities is "to reflect our reassessment of ongoing influence as well as the potential for extraordinary financial support from the parent," Tata Sons, it added. "The upgrades reflect our view that the credit profiles of the various Tata Group entities are strengthened by their importance to Tata Sons, with potential for financial support, if required," the ratings agency said. It further added, "we also expect Tata Sons to have a positive influence on the long-term strategy, financial policies and funding access of its group entities.We regard the credit quality of Tata Sons to be strongly investment grade."

S&P said the incorporation of group support into the ratings followed a revision to its approach to treating Tata Sons as a conglomerate rather than as an investment holding company. "We have observed that Tata Sons and its subsidiaries and associates have become a more cohesive group in recent years," it said. Citing factors such as Tata Sons' increased ownership in group entities over the last few years and its greater influence on the strategy and financial policies of the group companies, although the Tata Group entities operate independently with professional directors and management.