Tata Power Ratings on Credit Watch by S&P with negative implications

Tata Power Company Ltd has announced that Standard & Poor's (S&P) Ratings Services had placed the Company's corporate credit rating on Credit Watch with negative implications in May, 2007, post the Company's acquisition of Coastal Gujarat Power Ltd, an SPV formed to execute the 4,000 MW Mundra project. S&Ps has now revised its rating from 'BB' to 'BB-', the outlook being Stable. At the same time, the rating on the Company's Senior Unsecured Bonds has also been revised from 'BB+' to 'BB-.'

S&P's considers that the Company's expansion plans will substantially increase its consolidated debt and will result in a change in its credit parameters. At the same time, they believe that the Company's liquidity position is adequate. The stable outlook factors in the relative predictability in the Company's operating cash flows, stemming from its licensed businesses, stable operations and adequate liquidity. The Company is also expected to benefit from good access to financial resources and a well-staggered debt maturity profile.

Earlier in July, 2007, Moody's, Crisil and ICRA have also revised their respective long-term ratings on the Company to similar levels.

The Stock closed the day at Rs.680.25, down by Rs.0.95 or 0.14%. The stock hit an intraday high of Rs.687.50 and low of Rs.673.70. The total traded quantity was 44735 compared to 2 week average of 73088.

Source : Equity Bulls

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