Brokers in India are continuing to monitor the performance of Tata Motors following its acquisition of Jaguar Land Rover.
Analysts are concerned that the company may have saddled itself with too much debt in its attempts to acquire the two iconic brands, which it eventually secured from Ford in May in a deal worth £1.15 billion.
The company’s shares dipped by more than four per cent earlier this week and Standard & Poor’s Ratings Services - an international monitor of companies’ performances - said it was still taking a negative view of Tata, pending the outcome of long term financing plans covering the acquisition.
S&P said Tata Motors raised short term bridge facilities of £1.5 billion to fund the initial transaction, which it plans to repay through a mix of fresh equity infusion, liquidation of investments, and long term debt.
There are also concerns in India that while Land Rover has proved successful, Ford never made money from Jaguar.
Ironically, the two marques are enjoying a change of fortunes at the moment. Jaguar is riding the crest of a sales wave on the back of its popular new XF model, while Land Rover is struggling, probably due to concern over high fuel costs.
Despite the situation, Tata has said it will not shrink from making major investments in the two companies.
Managing director Ravi Kant said in an interview that the firm was committed to the two brands in the long term and would do whatever was required in order to make them successful.
He has said changes to the business plan agreed with Ford may be necessary if the current arrangements did not work out, although did not specify what they might be.
There is also speculation the company may invest in a new Jaguar sports car, as revealed in The Birmingham Post earlier this year. The sports cars produced by the firm down the years are known to be favourites of the company’s chairman, Ratan Tata.
Mr Kant said the firm had listened to the comments of a lot of people connected with company and the sports car sector and would be taking these into account when it drew up its plans.