Key facts
- S&P Global said a potential leadership transition and listing of Tata Sons would not immediately affect the ratings of Tata conglomerate companies.
- Tata Trusts proposed a restructuring to help Tata Sons avoid a listing.
- S&P rates Tata Steel, Tata Motors, Tata Power, Tata Power Renewable Energy and Tata Capital at BBB with a stable outlook.
- Tata Motors Passenger Vehicles has a BBB rating with a negative outlook.
- Jaguar Land Rover is rated BBB- with a negative outlook.
S&P Global said on Tuesday that a potential leadership transition and listing of Tata Sons would not immediately affect the ratings of companies within the Tata conglomerate, citing likely gradual changes to financial policies and independent professional management teams. The comments come amid a boardroom rift at India's Tata group, with controlling charities at odds with management over the reappointment of Chairman N Chandrasekaran and a listing mandate for the holding company.
Tata Trusts have proposed a restructuring that could help Tata Sons avoid a listing after the central bank rejected the company's request to surrender its status as a large non-bank finance company. Investors are closely tracking developments as a potential listing could unlock value for shareholders of group companies that have stakes in the unlisted parent.
S&P currently rates Tata Steel, Tata Motors, Tata Power, Tata Power Renewable Energy and Tata Capital at "BBB" with a stable outlook. Tata Motors Passenger Vehicles has a "BBB" rating with a negative outlook, while Jaguar Land Rover is rated "BBB-" with a negative outlook. A routine listing of Tata Sons would be credit-neutral in the near term, S&P said, but over the longer term, public shareholding could lead to greater scrutiny of capital allocation, shareholder returns and support for weaker group companies, potentially affecting its assessment of group support.