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S&P raises Tata Motors, TML
S&P said it upgraded its ratings on Tata Motors Ltd. and its subsidiary TML Holdings Pte Ltd. and their debt to BB from BB-. Tata owns Jaguar Land Rover plc (JLR).
“Tata Motors' leverage will likely decline over the next 12-18 months, driven by positive FOCF at JLR. We expect improved volumes, profitability, and positive working capital flow to support JLR's FOCF in fiscal 2024 (year-end March 31, 2024), which may exceed £750 million. This is despite our expectation that the company's capital expenditure (capex) could climb to about £3 billion. JLR's wholesale volumes could increase to 390,000-420,000 units in fiscal 2024,” the agency said in a statement.
S&P noted that Tata Motors plans to list its 75%-owned unit Tata Technologies. “We estimate the sale of a 20% stake as part of the initial public offer (IPO) will bring in cash of Rs. 30 billion- Rs. 35 billion (about $400 million). The remaining 55% stake worth about $1 billion should enhance financial flexibility and provide future monetization opportunities.”
The outlook is stable.
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