S&P Puts Six Tata Group Firms on Credit Watch with Positive Implications

S&P Global Ratings has placed six Tata Group entities on credit watch with positive implications. This decision is based on anticipated stronger group support. S&P's review will determine if Tata Sons can provide extraordinary support to its subsidiaries, influenced by increasing operational and management integration within the group.

S&P Global Ratings on Friday announced that it has placed six Tata Group entities on credit watch with positive implications, attributing this to a possible rise in group support. The entities include Tata Steel Ltd, Tata Motors Ltd, Jaguar Land Rover Automotive Plc (JLR), Tata Power Co Ltd, TML Holdings Pte Ltd, and ABJA Investment Co Pte Ltd, the agency confirmed in a statement.

This rating action precedes a review of the relationship between the group's holding company, Tata Sons Pte Ltd (unrated), and its subsidiaries. The review aims to evaluate whether Tata Sons can offer greater extraordinary support to these companies than previously estimated.

S&P Global Ratings highlighted increasing operational and management linkages within the group as a significant factor. Tata Sons has a track record of providing substantial support during times of stress, as seen with companies like Tata Teleservices Ltd and Coastal Gujarat Power Ltd, the latter now merged with Tata Power.

The review also aims to verify the ongoing and increasing operational integration between Tata Sons and its subsidiaries, as well as among the group entities. S&P pointed to Tata Sons' prominent role in shaping the financial strategy of the group, which focuses on managing leverage. Alongside this, the review will consider Tata Sons' enhanced flexibility to offer support and the group's improved cash flow generation.

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