S&P puts six Tata Group cos on credit watch rating with positive outlook

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S&P Global Ratings on Friday said it has placed credit watch ratings with positive implications on six Tata Group entities, citing possible increase in group support.

The companies are 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, S&P Global Ratings said in a statement.

The rating actions came ahead of a review of the relationship between the group's holding company, Tata Sons Pte Ltd (unrated), and its subsidiaries, it added.

S&P Global Ratings said its review will assess whether the potential of extraordinary support for the group entities from Tata Sons is greater than what it previously factored.

"This is due to increasing operational and management linkages within the group," the rating agency said, adding that Tata Sons has a record of supporting group entities in events of stress.

The group provided material extraordinary financial support to entities such as Tata Teleservices Ltd and Coastal Gujarat Power Ltd, an erstwhile subsidiary of Tata Power, which has now been merged with Tata Power, it added.

"We are also undertaking the review because we believe operational integration between Tata Sons and group entities, as well as between group entities, will continue to increase," it said.

Tata Sons has a clear imprint on the group's financial strategy, in line with a group-wide focus on managing leverage, S&P Global Ratings said, adding that its "review will also consider Tata Sons' improving flexibility to provide support and the group's more balanced cash flow generation".