 "Leadership changes on Tata Sons not to impact risk profile: CRISIL")
More than a week after Cyrus Mistry was replaced by Ratan Tata as chairman of Tata Sons, Rating agency CRISIL on Tuesday said the change in chairmanship will not have immediate on business and financial risk profile of holding company and group companies rated by it.
“However, management and strategy continuity is an important element of our credit analysis," CRISIL said in a statement tonight.
In a sudden development, Mistry was sacked by directors of Tata Sons, holding company of Tata group, on October 24, 2016 without elaborating on reasons for a decision.
CRISIL has assigned TSL “AAA”. Ratings reflects strong financial risk profile supported by healthy liquidity, sound capital structure and exceptional financial flexibility.
The agency continues to have discussions with Tata Sons and the group companies to understand any likely impact of the transition on the business and growth strategies, or support to group companies.
CRISIL said discussions with management at Tata Sons indicate it will continue to prudently support group companies and any change in strategy will only be gradual.
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CRISIL will continue to monitor the developments and will take appropriate rating actions in case of material changes in business strategies.
For group companies, CRISIL’s ratings are primarily driven by their respective business and financial risk profiles along with management strength and in certain cases expectation of continued support from Tata Sons, CRISIL added.