• Preference share programme - Rs 150 crore Rating: pfAA+
• Non-convertible debenture - Rs 150-crore Rating: AA+
• Non-convertible debenture - Rs 150 crore Rating: AA+ (reaffirmed)
• Non-convertible debenture - Rs 600 crore Rating: AA+ (reaffirmed)
• Non-convertible debenture - Rs 16 crore Rating: AA+ (reaffirmed)
• Bond programme - Rs 540 crore Rating: AA+ (reaffirmed)
• Secured premium note programme - Rs 170 crore Rating: AA+ (reaffirmed)
• Fixed deposit programme Rating: FAAA
• Commercial paper programme - Rs 400 crore Rating: P1+

Crisil has assigned an ‘AA+’ (pronounced ‘double A plus’) rating to the Tata Iron and Steel Company''s proposed Rs. 150-crore non-convertible debenture issue, and a  ‘pfAA+’ (pronounced ‘pf double-A plus’) rating to its proposed Rs. 150-crore preference share issue. The outstanding ratings of the non-convertible debenture and bond programmes of Tisco have been reaffirmed at ‘AA+’. The ‘FAAA’ (pronounced F triple-A) rating assigned to the fixed deposit programme and the ‘P1+’ rating assigned to Tisco’s Rs.400-crore commercial paper programme have been reaffirmed.

The ratings reflect Tisco’s business strengths arising from improved operating efficiency and plans to reduce debt levels in the future which offset the moderate increase in leveraging over the past few years. Low cost inputs due to captive mines, continuous investment in modernisation of manufacturing facilities and efforts to reduce operating costs are expected to further enhance Tisco’s competitiveness in the steel industry. The effect of lower levels of cash generation on account of sustained downturn in the steel industry coupled with large capital investments have increased leveraging. Tisco’s financial flexibility on account of its status as the flagship company of a premier industrial group in the country and the management’s plans to reduce debt levels in the medium term have been favourably factored in the rating.

Over 90 per cent of Tisco''s sales come from steel and related businesses like steel tubes. Other businesses include ferro alloys and bearings. Tisco sold its cement unit to Lafarge of France in October 1999. In the first half of 1999-00, Tisco''s profits were Rs. 90.5 crore on sales of Rs. 3,100 crore.