Moody’s says Tata Steel’s ratings unaffected by equity offering

Singapore, July 21, 2009 -- Moody's Investors Service says that Tata Steel 
Ltd's (Tata Steel) proposed equity offering has no impact on the 
company's ratings. This follows Tata Steel's announcement of an equity 
offering in the form of Global Depository Receipts ("GDR") for a gross
amount of US$500 million.

The proceeds of the GDR issuance will be used for the group's planned
capital expenditures, including the expansion of production capacity at 
Jamshedpur and overseas mining projects.

"Moody's rating and outlook on Tata Steel has factored in the potential 
rights offering to support its capex plan in FY2009-10," says Ivan 
Palacios, a Moody's AVP/Analyst.

"With projected consolidated operating cash flow not fully able to cover 
its capex plan, Moody's expects the group to generate negative free cash 
flow in FY2009-10. In this context, the proceeds from the equity issue 
will provide additional support to cover the free cash flow deficit and 
help alleviate some pressure on the company's liquidity for debt 
maturities of US$600 million in FY2009-10," says Palacios, also Moody's
lead analyst for the company.

"However, this equity offering has only had a limited impact on Tata 
Steel's credit metrics and thus has not affected its rating or rating 
outlook," he adds.

Moody's last rating action on Tata Steel was taken on June 8, 2009, when 
it downgraded the company's corporate family rating to Ba3 from Ba2 with 
a stable outlook. 

The principal methodology used in rating Tata Steel was "Rating 
Methodology: Global Steel Industry", which can be found at www.moodys.com 
in the Credit Policy & Methodologies directory, in the Ratings
Methodologies subdirectory.

Other methodologies and factors that may have been considered in the 
process of rating this issuer can also be found in the Credit Policy & 
Methodologies directory.

Tata Steel Ltd is an integrated steel company headquartered in Mumbai.
After the acquisition of Corus, Tata Steel became the world's sixth 
largest steelmaker with an annual production capacity of around 29.9 
million tons of crude steel.