Tata Steel received a credit rating affirmation from S&P Global Ratings on December 24, 2025, maintaining its BBB issuer credit rating with a stable outlook. The company disclosed this development through a regulatory filing under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Regulatory Disclosure and Rating Affirmation

Tata Steel informed stock exchanges BSE Limited and National Stock Exchange of India Limited about the rating affirmation through an official communication. S&P Global Ratings cited higher volumes and cost-reduction initiatives as factors balancing the impacts of growth projects in their decision to affirm the rating.

Growth Investment Impact on Leverage

The steel manufacturer's planned expansion at Neelachal Ispat Nigam Ltd. (NINL) and downstream capacity additions will significantly increase annual capital expenditure. S&P estimates these investments will raise annual capex by ₹100.00 billion to ₹200.00 billion over the next few years, resulting in negative discretionary cash flow and delayed deleveraging.

On December 10, 2025, Tata Steel announced a 4.80 million ton capacity expansion at NINL, requiring an estimated capital outlay of ₹400.00 billion to ₹450.00 billion over three to four years. The company also plans to add rolling, pickling, and galvanizing lines at various Indian sites to increase value-added product share.

Financial Projections and Market Challenges

S&P projects Tata Steel's adjusted debt will increase to ₹1,100.00 billion in fiscal 2028, approximately ₹380.00 billion higher than previous forecasts. Lower steel prices are expected to weigh on fiscal 2026 earnings, with domestic hot rolled coil prices correcting by more than 10% from May 2025 highs of ₹52,500.00 per ton.

Operational Improvements and Cost Efficiencies

The rating agency anticipates ₹30.00 billion to ₹35.00 billion in savings through curtailment of U.K. business losses and optimized iron ore pellet sourcing. A ramp-up at the Kalinganagar facility would add approximately 2.50 million tons to total output in fiscal 2027, while new downstream facilities will improve both product mix and EBITDA per ton.

S&P forecasts Tata Steel's EBITDA will increase 30% to ₹410.00 billion in fiscal 2027, compared with an estimated ₹319.00 billion for fiscal 2026. This earnings growth is expected to lift the company's funds from operations to debt ratio to 26%-27%.

Outlook and Rating Scenarios

The stable outlook reflects expectations that credit metrics will recover over the next 12-18 months, supported by higher output volumes in India and reduced U.K. losses. The company is expected to fund recently announced growth projects largely through operating cash flow, with the FFO to debt ratio likely improving to comfortably above 20%.

Downside risks include delayed capacity ramp-up at Kalinganagar due to sluggish demand or continued operating losses in the U.K. An upgrade would require demonstrating a track record of operating at lower leverage through steel price cycles, with a sustained FFO-to-debt ratio comfortably above 30%.

Tata Steel has received extended interim protection from the Orissa High Court at Cuttack until January 8, 2026, in two material litigation cases involving substantial financial demands from mining authorities. The company disclosed this development through a regulatory filing dated December 23, 2025, following the court's order dated December 19, 2025.

Dual Legal Challenges Over Mining Compliance

The steel major is contesting two separate demand letters from the Office of Deputy Director of Mines, Jajpur, related to its Sukinda Chromite Block operations. These demands stem from alleged violations of Rule 12-A of the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 (MCR 2016).

Court Proceedings and Interim Relief

Both writ petitions seek quashing of the respective demand letters issued by mining authorities. The Orissa High Court tagged both petitions with similar cases and granted interim protection restraining authorities from taking coercive action against the company. For the first petition, the court initially granted interim protection on August 14, 2025, which was subsequently extended through multiple hearings until December 19, 2025. The second petition received similar protection starting November 21, 2025, also extended until the same date.

Financial Implications and Regulatory Context

The combined demand of ₹4,313.62 crores represents significant financial exposure for Tata Steel. The mining authorities' demands are connected to revised assessment of shortfall in mineral dispatch from Sukinda Chromite Block and alleged violations under Mine Development and Production Agreement terms, leading to consequent appropriation of performance security.

Current Status and Regulatory Compliance

Following the December 19, 2025 hearing, the Orissa High Court has extended interim protection for both matters until January 8, 2026. This protection prevents mining authorities from taking any coercive measures against Tata Steel while the legal proceedings continue. The company has made this disclosure in compliance with Regulations 30 and 51 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ensuring transparency regarding material litigation that could impact its operations and financial position.