Tata Group shares in demand

Shares of 13 Tata Group companies rose by 0.04% to 7.88% at 10:40 IST on BSE after Moody's Investors Service upgraded ratings of several Tata Group companies on account of Tata Sons' track record in providing timely support to these firms.

Tata Sponge Iron (up 7.88%), Tata Investment Corporation (up 6.63%), Tata Metaliks (up 5.02%), Tata Teleservices (Maharashtra) (up 3.78%), Tinplate Company of India (up 3.63%), Tata Chemicals (up 1.28%), Tata Power (up 1.25%), Tata Coffee (up 0.95%), Tata Global Beverages (up 0.73%), Tata Steel (up 0.46%), Tata Communications (up 0.37%), Rallis India (up 0.17%) and Tata Motors (up 0.04%), edged higher.

However, Titan Company (down 0.54%) and Voltas (down 0.93%), edged lower.

The S&P BSE Sensex was up 26.04 points, or 0.10% at 27,138.25.

Moody's Investors Service upgraded corporate family ratings of Tata Motors to Ba2/Stable from Ba3/Stable, Tata Chemicals' to Ba1/Stable from Ba2/Stable, Tata Steel's to Ba2 from Ba3, Tata Steel UK Holdings' to B2 from B3, Tata Power's to Ba3/Stable from B1/Negative and affirmed Tata Consultancy Services' local currency issuer rating at A3/Stable.

The ratings of Jaguar Land Rover Automotive plc and Tata Chemicals North America Inc. have not been affected by the rating actions, Moody's Investors Service said in a statement.

Upward ratings' revision reflects agency's expectation of parental and systemic support in case of need, which has been exhibited both in the form of extraordinary financial support from Tata Sons, the ultimate parent, and ongoing support through their close association with the Tata brand, Moddy's Investors Service said.

Multiple rating actions are based on the track record of Tata Sons in providing timely support to investee companies and Moody's assessment of its ability to provide future support and on the need to protect the brand reputation of Tata from the consequences of an entity's distress, it said.

"In recent years, we have 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", says Alan Greene, a Moody's Vice President, Senior Credit Officer.

Tata Sons is 66%-owned by philanthropic trusts created by generations of the Tata family. Such shareholders are unlikely to inject new equity into Tata Sons and so Moody's expects the shareholders to be accommodative with respect to the cash needs of Tata Sons and to support its plans for investment in Group businesses, Moddy's Investors Service said.

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