Mahindra and Mahindra Ltd.

• Non Convertible Debenture - Rs. 3000 million Rating : Upgraded from AA+ to AAA
• Non Convertible Debenture - Rs. 1557 million Rating : Upgraded from AA+ to AAA
• Non Convertible Debenture- Rs. 1200 million Rating : Upgraded from AA+ to AAA
• Non Convertible Debenture- Rs. 746 million Rating : Upgraded from AA+ to AAA

• Commercial Paper Programme- Rs. 2400 million Rating : P1+ (Reaffirmed)

The ratings assigned to the Non Convertible Debenture issues of Mahindra & Mahindra Limited (M&M) has been upgraded to AAA (pronounced triple A) from AA+ (pronounced double A plus). The rating assigned to the commercial paper programme has been reaffirmed at P1+ (pronounced P one plus) (Enhanced from Rs.1500 mn).

The rating revision is on account of the improvement in the company’s financial risk profile subsequent to the conversion of the company’s foreign currency convertible bonds, consistently strong market position in the utility vehicle and tractor businesses, and the beneficial effects of the business process reengineering exercise on the company’s cost structure. The rating also takes into account the sluggish volume growth seen in both the tractor and utility vehicle market over the last 18 months, the increasing competitive pressures seen in the tractor business and the company’s ongoing efforts to establish its new product development skills. The rating assumes a consolidation of the company’s present business without any significant capital expenditure plans beyond the programme that is presently under execution.

M&M is the largest multi utility vehicle (MUV) and tractor manufacturer in India and is also engaged in the manufacture and sale of light commercial vehicles. The company registered a turnover of Rs. 402.51 billion and achieved a PAT of Rs. 22.86 billion in 1998-99.