Moody's rating to aid large deal hunt: TCS

MUMBAI: India's largest software services provider Tata Consultancy Services Ltd. hopes to be better-positioned to take on larger critical contracts from overseas clients following investment grade rating from Moody's.

Moody's Investors Service on Friday assigned an A3 issuer rating and an indicative foreign currency debt rating of Baa1 to Tata Consultancy in its first ever rating of the company.

Moody's said the rating was only indicative and not assigned to any specific debt issuance.

"We have not taken it for any specific contract that is likely to come up right now nor have we taken it for any debt issuance," S. Mahalingam, chief financial officer of TCS told Reuters.

"We have gone in for a rating because when you bid for complex projects, the potential customer may ask for a rating," he said.

Mahalingam said it was better that the company gets the rating before hand "rather than run around at the last minute."

State-run exploration giant Oil and Natural Gas Corp. Ltd. is the only other Indian company to have a Baa1 rating, two notches above India's sovereign rating.

Mahalingam said the rating reflected TCS' strength in a highly competitive market.

TCS has been getting large multi-year contracts in the past few months.

Large deals since July include a $100 million contract from a financial services client, a $250 million contract from Tata Teleservices and a deal with the potential for $848 million in revenue over 12 years from British insurance firm Pearl Group.

These deals have given greater market visibility to TCS.

"We are in the growth business. The machine is cranking," Mahalingam said. "It (rating) makes us more eligible and well-positioned from a company strength point of view."