Cyrus-Tata tussle: Brickwork puts Tata Chem NCDs 'under watch'

Citing "heightened management risk" in the wake of Cyrus Mistry's ouster as chairman of Tata Sons, Brickwork Ratings has placed the rating of Tata Chemical's unsecured non-convertible debentures worth Rs 250 crore "under watch".
"This is to inform you that Brickwork Ratings has placed the earlier rating of BWR AA+ (Outlook: Stable) to BWR AA+ under watch with developing implications to the company's unsecured NCD issue of Rs 250 crore," Tata Chemicals said in a regulatory filing.
Brickwork said in a letter to Tata Chemicals that the rating has been put under watch with developing implications "on account of heightened management risk due to change in top management at holding company/group level, which may impact the strategic decision making in TCL".

Earlier this week, Cyrus Mistry was removed abruptly as chairman of the Tata Group and replaced by his predecessor Ratan Tata, who will lead India's biggest conglomerate for the next four months till a permanent replacement is identified by a specially-created committee.
The rating continues to factor the company's diversified product portfolio and geographical presence, large market share, professional management and group support enjoyed by the company.
The rating is constrained by profitability susceptible to volatility in raw material prices, exposure to cyclical soda ash business and highly regulated fertilizer business, under recovery of subsidy as well as stretched working capital cycle and the weak performance of its relatively high-cost European and Kenyan operations.

TCL is currently the world's second largest producer of soda ash with manufacturing plants in India, the UK, Kenya and the US. It is one of India's largest producers of inorganic chemicals and fertilizers.
Over the years TCL has expanded its operations into edible salt (Tata salt, IShakti/Tata Sampann, Tata Salt Plus and Flavoritz), Phosphatic fertilizers, urea and cement and its agri business includes crop nutrition, agric chemicals and pesticides.