Moody's cuts Tata Motors to Ba2

Moody's Investors Service said it downgraded the corporate family rating of Tata Motors Ltd. to Ba2 from Ba1 following news that it has completed the acquisition of Jaguar Land Rover.

The outlook is negative.

The change reflects the considerable challenges that Tata Motors will face in successfully integrating such a large operation, which only recently turned profitable, and the immediate impact on its financial profile, Moody's said.

The rating continues to be underpinned by the strong market position that Tata Motors commands in the commercial vehicle business and in the low- and mid-end passenger vehicle segments in the fast-growing Indian market, Moody's added.

However, the acquisition will expose it to new product categories and broader geographies, areas of limited experience for Tata Motors, the agency said.

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