S&P: Tata Consultancy unchanged

Standard & Poor's said that its rating on Tata Consultancy Services Ltd. (BBB/positive) is not affected by the company's recent announcement that it plans to acquire Citigroup Global Services Ltd., the outsourcing arm of Citigroup Inc. (AA-/watch negative/A-1+), for about $505 million in cash by the end of the year.

The agency said it believes the acquisition is in line with Tata Consultancy's strategy to strengthen its outsourcing business and will enhance its portfolio of end-to-end IT and BPO services to the global banking and financial services sectors.

While the acquisition should lower Tata Consultancy's liquidity and marginally increase industry and customer concentration, the agency said that the company's credit metrics remain adequate for the current rating, given the company's conservative financial profile and consistently profitable track record.

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