Tata Motors’ assessment has been reaffirmed by CARE Ratings across bank facilities and non-convertible debentures and commercial paper issues. The Rating agency has cited the company’s establishment track record along with robust backing of Tata group. The long-term and short term bank facilities were reaffirmed by CARE AA-(negative outlook) and CARE A1+ respectively and Non-convertible debenture were affirmed CARE AA- with a negative outlook and commercial papers were reaffirmed CARE A1+.
On Wednesday CARE Rating agency said, “the rating that is given to the bank facilities, Non-convertible Debentures and commercial Papers assigned to the Tata Motors Limited(TML) continue to play a reason for the established track record of TML as one of the India’s largest automobile original Equipment Manufacturers(OEMs) joined with its strong market share in domestic Commercial vehicle industry, its strong product portfolio under Jaguar Land Rover(JLR).”
“TML being part of Tata group enjoys immense financial flexibility and has various fund -raising artery joined with company both at JLR and TML standalone level,” it added
The company has liquidity buffer of Rs 11,043 crore on a standalone basis and 2.58 billion pounds at Jaguar Land Rover level. Also, the committed funds infusion by Tata Sons Private Limited (Tata sons) to the tune of Rs 6,494 crore of which approx Rs 3,892 crore already received in FY20 provides comfort to the ratings.
Rating agency said, “The rating strengths are restricted by large volume of decline in JLR as well as India business [both CV and passenger vehicles;(PV)] due to slowdown in the global automative sector which has further excerbated by COVID-19 and deterioriated in financial performance and debt coverage indicators for FY20 and Q1FY21.”
During the time, Tata Motors has been hit to a loss for the second straight quarter in Q1 FY21 due to the Coronavirus lockdown which impacted negatively on its sales in India and overseas. June 30, 2020 stood at Rs 8,438 crore, as opposed to Rs 3,698.34 crore loss recorded in Q1 FY20 and Rs 9,863.75 crore loss in Q4FY20. The total revenue from operation slumped 48 per cent to Rs 31,983 crore during the quarter under the review against Rs 61,466.99 crore in the same period of previous year.
