Rating agency Moody's Investors Service has upgraded the corporate family rating of Tata Steel Ltd to Ba1 from Ba2. The rating outlook remains stable. The upgrade to Ba1 reflects Tata Steel's conservative financial policies, which combined with Moody's expectations of strong operating performance throughout fiscal 2022, will contribute to further deleveraging and balance sheet strengthening. Moody's expects the company to reduce gross debt by at least a third -- or by around $5.8 billion by March 2022 from March 2020 levels. The upgrade reflects the rating agency's expectation of moderate financial leverage and ample interest coverage for Tata Steel in a normalised steel price environment due to significant debt reduction in 2021. Tata Steel's adjusted leverage declined to an estimated 2.1x at June 2021 from 6.5x at March 2020, and will wane further to 1.5x at the end of this fiscal year on the back of current positive dynamics for the steel industry. Over time, Moody's forecasts the company's leverage will track within 1.5x-2x and free cash flows to remain positive even as the annual capex reaches $1.5 billion.