The rating agency, however, considered Tata Steel tobe well-equipped to cope with the impact of the coronaviruspandemic, with free cash of close to Rs 75 billion andcommitted credit lines against a short-term debt of Rs 80billion at end-March, 2020.
"A prolonged lockdown of the businesses will lead toconsiderable curtailment of demand for an extended period,thereby impacting the companys credit metrics beyond FY21,"Ind-Ra said in a note.
The outlook revision reflects "the risk of asubstantial deterioration in the company's credit profilecaused by the COVID-19 containment measures, and the overallimpact of the lockdown on key end-user segments, includingconstruction, infrastructure and automobiles," the ratingagency said.
The steel maker Monday said it has approved a proposalto raise up to Rs 7,000 crore through non-convertibledebentures (NCDs).
Tata Steel officials earlier indicated that theoperation level at its key sites was at about 50 per centduring the lockdown.
The agency expected the steel maker's "near-termprofitability to be impacted" by both fall in metal prices andreduction in capacity utilisations.
"Along with inventory losses due to the falling metalprices, higher competitive intensity to exhaust the inventorybuild-up could exert pressure on gross margins," the ratingfirm said. BSMBDC BDC