Tata Motors credit rating has been down graded only days after the company launched the World's cheapest car.

Credit rating agency Standard and Poor took the decision after citing deteriorating cash flow  stemming from Tata's $2.3bn acquisition last year of Jaguar Land Rover, reports the Financial Times.

However S&P said: "The newly-launched Nano has the potential to gradually provide material benefit to Tata Motors' cash flow."

The Nano was unveiled on Monday at a ceremony in Mumbai with a starting price of about £1,300.