Rs 750 Million Non-Convertible Debenture Issue of Tata Sons has been rated AAA by Crisil. The ratings continue to reflect Tata Sons’ leading business position in the Indian software industry (through its division, Tata Consultancy Services) as well as its significant financial flexibility arising from its status as the principal holding company of the large and diversified Tata group. These positives are well-supported by the company’s high profitability, strong cash accruals (close to Rs 10 billion for fiscal 2003, representing about 25% of its total debt and guarantees) and favourable interest coverage (about 6 times for fiscal 2003), which offset the negative of continued high gearing (0.78 times for the year ending March 2003 and slightly over 1 time after including guarantees). Moreover, Crisil believes that at present, these strengths adequately mitigate any potential stress on Tata Sons’ balance sheet, which may arise from the company’s participation in the Tata group’s large investment plans in the telecom sector and its possible financial support to relatively weak group companies. Nevertheless, Crisil shall continue to monitor the emerging regulatory and competitive landscape in the relatively high-risk telecom sector, which may have a bearing on the returns on the company’s investments and consequently, its credit profile.