Tata Group companies see uptick in Moody’s ratings

Mumbai: Rating agency Moody’s Investors Service upgraded several Tata Group companies –Tata Motors, Tata Chemicals, Tata Steel and Tata Power -citing ‘extraordinary’ financial support from parent Tata Sons.

The upgrades are based on the track record of Tata Sons in providing timely support to its investee companies and its need to protect the brand reputation of Tata from the consequences of an entity’s distress, Moody’s said in a statement.

In recent years, Moody’s has seen Tata Sons inject money, typically through equity rights issues, into its companies, to fund their growth plans or to bolster any weak balance sheets, said Alan Greene, vice president and senior credit officer at Moody’s.

Tata Sons is promoter of Tata companies and owns significant share in these firms. “As Tata’s involvement in consumer facing businesses in India increases, coupled with its growing international presence, the Tata name, with more than 100 years of history, has become a globally significant brand and is therefore critical to maintain the Group’s standing with customers, employees and investors alike,” said Greene.

Greene added that with glimpses of recovery in some of the worst affected sectors of the Indian economy, the bulk of Tata Sons’ disbursal could now be directed into the group’s growth areas and not into resolving old troubles.