New Delhi, Sep 21 (PTI) India Ratings and Research said Friday it has affirmed Tata Steel’s long-term issuer rating at ‘IND AA’ with stable outlook.
Instruments with ‘IND AA’ rating are considered to have high degree of safety regarding timely servicing of financial obligations and such instruments carry very low credit risk, according to the India Ratings and Research.
“India Ratings and Research has affirmed Tata Steel Ltd’s long-term issuer rating at IND AA, while resolving the Rating Watch Evolving (RWE). The Outlook is Stable. Ind-Ra had placed the ratings on RWE on April 11, 2016,” it said in a statement.
The RWE resolution follows clarity on the overall impact on TSL’s credit profile post acquisition of Bhushan Steel Ltd (BSL) and carving out of its European operations, it said.
In June, Tata Steel had agreed to the terms of a 50-50 joint venture with Germany’s Thyssenkrupp to create Europe’s second-largest steel company after Lakshmi Mittal’s ArcelorMittal.
IND-Ra said the integration of Bhushan Steel Ltd operations and carving out of the European operations will substantially improve the company’s business profile with a stronger per tonne EBITDA (earnings before interest, taxes, depreciation and amortization).
Besides, the agency expects acquisition of BSL will aid TSL in further expanding its footprint in eastern India, strengthening customer segments across automotive, appliance, tubes, general engineering and fabrication; and maintaining steady proportion of downstream products.
This is published unedited from the PTI feed.