Moody’s assigns Baa2 Corporate Rating to Tata Steel with stable outlook
March 21, 2005

The international credit rating agency, Moody’s Investor Services (Moody’s) have assigned Tata Steel, the Senior Implied (Corporate) Rating of Baa2 with stable outlook today. The Baa2 fundamental rating for Tata Steel is one notch above Moody’s current sovereign rating for India of Baa3. This rating is one of the highest ratings amongst Indian companies and compares favourably with global steel companies.

The Senior Implied Rating reflects Moody's opinion on Tata Steel’s ability to honour its financial obligations as if it had a single class of debt and a single consolidated legal entity structure. It also reflects Tata Steel’s strong position in the domestic steel sector, its globally competitive cost position, a significant degree of vertical integration and prudent management capability demonstrated over a period of time. The rating also reflects the company’s solid financial profile in its rating category.

Currently, Tata Steel is producing around 4 mtpa steel at its Jamshedpur works. It is presently expanding its capacity by 1 mtpa in Jamshedpur, which is expected to be completed by mid 2005-06. Tata Steel plans to become a 15 million tonnes steel company by 2010 through organic growth and acquisitions.

Commenting on the rating, B Muthuraman, managing director Tata Steel said “The rating demonstrates Tata Steel’s fundamental strength as a globally competitive steel company. The company will endeavour to pursue profitable growth in India and globally through greenfield projects and acquisitions in the future. Tata Steel is committed to create sustainable value for all its stakeholders and will continue to follow prudent financial management norms in funding its future growth.”

Koushik Chatterjee, vice president (finance) Tata Steel said “The fact that Tata Steel has achieved a rating higher than the sovereign rating clearly indicates Tata Steel’s financial strength and its inherent value creating potential. The rating is an important enabler to fund and execute Tata Steel’s growth plans in the future. Tata Steel remains committed to maintain superior credit rating through prudent credit protection measures and risk management process.”