India Ratings and Research (Ind-Ra) has affirmed Tata Steel long-term issuer rating at 'AA' while maintaining a negative outlook. The agency has also assigned the company's Rs 5 billion commercial paper (CP) programme an 'A1+' rating.

The ratings have been affirmed despite Tata Steel's weakened FY15 financial performance because of the strong likelihood of a significant improvement in the revenue and profitability of its India operations in FY16 and improved liquidity thereon in European operations due to the refinancing of a major portion of debt.

The ratings continue to be weighed down by weak demand conditions globally leading to large scale imports into India, and the low probability that European operations could report a significant improvement in top-line and profitability in the next two years.

Ind-Ra's rating view on the company is on a consolidated basis. The rating approach factors in a one notch uplift for its strong operational and strategic linkages with the Tata Group.

Shares of the company declined Rs 8.6, or 3.45%, to trade at Rs 240.50. The total volume of shares traded was 700,638 at the BSE (10.09 a.m., Thursday).