S&P is of the view the company has adequate liquidity, both at JLR and at the Indian operations, to face the challenging period.
S&P Global Ratings on Thursday downgraded both the long-term issuer credit rating on Tata Motors and its long-term issue rating on the company’s senior unsecured notes to ‘B’ from ‘B+’. The rating agency expects operating conditions for Tata Motor’s India business will remain challenging in the coming quarters and that lower sales volumes will pressure profitability at the company’s UK-based subsidiary, Jaguar Land Rover Automotive Plc (JLR).
Data from Bloomberg put the company’s total debt at Rs 95,465 crore at the end of December 2019.
However, S&P is of the view the company has adequate liquidity, both at JLR and at the Indian operations, to face the challenging period. The Indian operations’ fundraising of Rs 6,500 crore (about $900 million) in October 2019 has bolstered liquidity.
Moreover, the company has no large debt maturities in the next two to three years, which also supports its liquidity. The stable outlook mainly reflects the agency’s view that Tata Motors will maintain adequate liquidity over the next two years. This would partly mitigate its weakening leverage and cash flow-based metrics.