New Delhi: India’s biggest conglomerate Tata Group just got another feather to its hat. Global rating agency Fitch has assigned the highest rating of 'F1+(ind)' to Tata Steel's Rs 500 crore short-term debt programme.
The rating with stable outlook reflects the company's position as an efficient value added steel producer, with significant iron-ore and coal linkages, making it one of the low-cost steel producers in the world, Fitch said in a release.
The acquisition of Anglo-Dutch steel maker Corus gave Tata Steel a strong foothold in the European market with access to value-added products and an established distribution network, it said.
Fitch has also assigned 'AAA (ind)' to Tata Steel. The company's rating benefits from the support the agency expects from Tata Sons as evidenced by the equity contribution for the acquisition funding, it said.
Fitch also noted the lack of immediate synergies from the transaction as Tata Steel does not plan to supply low-cost slabs and iron-ore to Corus.
However, it drew comfort from Tata Steel's ongoing cost reduction initiatives, strong operational framework and the plan to deliver the consolidated balance sheet over the next three-years.
With PTI inputs
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