Tata SSL's rating upgraged

The rating assigned to the Rs. 26.42 crore debenture programme of Tata SSL (Tata SSL) has been removed from rating watch and upgraded from A minus (single A minus) to AA minus (double A minus). This follows the increased holding in Tata SSL by the Tata Iron and Steel Company (Tisco, Crisil rated AA plus/FAAA/P1 plus) through a cash offer to equity share holders of Tata SSL. Through this process, Tisco has raised its shareholding in Tata SSL to 83 per cent.

Tata SSL will benefit significantly from the ownership by Tisco. Besides an enhancement in benefits such as management support and financial flexibility, Tisco's ownership is likely to drive the company's leadership in the wires business and offer solutions in reducing operating and financial costs of Tata SSL. The rating however continues to reflect the sub-par financial position of the company, high cost operations, volatile domestic market conditions and its necessity to invest in a capital intensive business for growth.

At present, 83 per cent of Tata SSL is held by Tisco and its wholly owned subsidiary, Kalimati Investment Company (Kalimati), enhanced from 45 per cent held in the past through an open offer.

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Section  : Business
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