S&P Global Ratings Upgrades Ratings For Tata Groups, Shows A Stable Outlook, Share Prices

The S&P Global Ratings, a reputed rating agency on Thursday has upgraded the ratings for 5 companies under the Tata group, India, including Tata Steel, Tata Motors, and Jaguar Land Rover (JLR). The rating agency has also mentioned the 'extraordinary financial support' from the Tata Sons, which showed their importance to these entities. The credit profiles of the multiple Tata Group entities have been strengthened by the parent group, the rating agency thinks.

Rating up-gradation

The S&P Global Ratings has upgraded the ratings on Tata Steel and its 100%-owned financing subsidiary ABJA Investment Co. Pte Ltd to 'BBB-' from 'BB', which is showing a stable outlook. On the other hand, the rating agency has upgraded the rating for Tata Motors Ltd. and its fully-owned arm TML Holdings Pte Ltd to 'BB-' from 'B', with a stable outlook. Additionally, the Jaguar Land Rover Automotive PLC (JLR), the group's British luxury vehicles maker also received a rating up-gradation to 'B+' from 'B', by the S&P Global Ratings.

The stock price of the entities under the Tata group

Here is the stock prices chart of these Tata group entities, in NSE.
Tata Steel's stock price was quoted at Rs. 1,316.75, which was up +2.05 (0.16%) till 9.35 AM IST, on October 22. Tata Steel's market capital is Rs. 158124.42, at present.
However, for Tata Motors, the stock price was quoted at Rs. 503.00, which was down -5.00 (0.98%), till 9.37 AM IST, on October 22. Tata Motor's market capital is Rs. 181681.68, at present.

Tata: Conglomerate rather than an investment holding company

S&P Global Ratings is currently having an approach to treat the Tata Sons 'as a conglomerate rather than as an investment holding company'. The report of the rating agency added, "Further, Tata Sons has demonstrated financial support mainly during periods of financial stress as opposed to regular co-investments or capitalization to maintain credit strength, as seen in conglomerates with a stronger group linkage."

The report also mentioned, "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." It added, "We have observed that Tata Sons and its subsidiaries and associates have become a more cohesive group in recent years."