Shares of automobile manufacturer Tata Motors plunged in the morning trade on Wednesday morning, after S&P Global Ratings cut Tata Motors’s long-term rating, the second downgrade for the firm.
Shares of automobile manufacturer Tata Motors plunged in the morning trade on Wednesday morning, after S&P Global Ratings cut Tata Motors’s long-term rating, the second downgrade for the firm. Notably, Tata Motors share price plunged more than 3% to hit the day’s low at Rs 93.25 after S&P Global Ratings cut its rating deeper into junk category citing headwinds for the company’s Jaguar Land Rover subsidiary.
Mumbai-based Tata Motor’s leverage may deteriorate over the next 12 to 18 months due to the weaker-than-expected performance of Jaguar Land Rover Automotive Plc, S&P said in a statement on Tuesday. The automaker’s rating remains on credit watch with negative implications given uncertainties around Brexit and will be revisited once the outcome for the U.K. is clearer, S&P Global ratings added.
Notably, S&P lowered Tata Motors’s long-term issuer credit rating and long-term issue rating on its U.S.-dollar-denominated senior unsecured notes to BB- from BB. S&P had previously cut its rating on Tata Motors in July.
According to a PTI report, Tata Motors is planning a large-scale overhaul of its showrooms across the country over the next one year as it prepares to bring in new products. “We acknowledge that our showrooms and workshops need complete overhauling and accordingly we have hired a global consulting agency to look into upgrading all our showrooms,” Tata Motors President Passenger Vehicles Business Unit Mayank Pareek told PTI in an interview.
Jaguar Land Rover’s bond risk more than quadrupled this year as the automaker faces uncertainty in Europe over its diesel vehicles and Brexit as well as weaker demand in China, said a Bloomberg report. Tata Motors posted a larger-than-expected second-quarter loss and said JLR will deliver cost and cashflow improvements of 2.5 billion pounds ($3.2 billion) over 18 months, the report added.