The Tata group’s financial services firm Tata Capital, is planning to raise 15,000 crores ($1.72 billion) through a combination of debt instruments which will include non-convertible debentures and green bonds. The board has approved the plans to raise the funds.
Tata Capital will use the proceeds for on-lending purposes and business operations to get its shares listed by September this year, to meet the Reserve Bank of India’s (RBI’s) deadline.
On February 6th, the board of directors approved the raising of ₹10,000 crore through green bonds and market-linked NCDs on a private placement basis.
According to the company’s filings, Another ₹5,000 crore is also set to be raised through the issuance of secured redeemable NCDs with a liquidity window facility. Tata Capital has not responded to these fundraising plans.
The boards of Tata Capital and Tata Motors Finance approved the merger of the latter into TCL In June of last year, which has now been approved by the Reserve Bank of India (RBI) and the respective lenders of both companies.
The rating firm Fitch Ratings has stated that Tata Capital has been recognized as an 'Upper Layer' NBFC by the RBI, meaning stricter regulatory requirements include a requirement for a public listing by September. The public issuance is expected to strengthen the capital base and reduce the leverage further. Besides, Tata Sons, which currently holds a 93 percent stake in TCL, is not expected to reduce the holding below 75 percent in the planned IPO, Fitch stated.
By the merger of Tata Motors Finance (TMFL) with Tata Capital, 4.7 per cent shareholding of the merged company will go to TMF Holdings (Core investment company of Tata Motors).
