Money & Banking

Tata Capital plans to raise Rs 4,126 cr through domestic borrowings

PTI | Updated on August 08, 2019 Published on August 08, 2019

Eyes $150-m overseas borrowing via ECB in Q3

Tata Capital Financial Services is planning to raise $150 million from overseas market next quarter, a senior official said on Thursday.

The Tata Group company is also planning to raise up to Rs 4,126 crore through a domestic bond sale next week.

“We want to diversify our borrowings and also look at cheaper funding sources,” Tata Capital managing director and chief executive Rajiv Sabharwal said.

Treasury head Kiran Joshi told PTI that the company is looking to raise $100-150 million through the external commercial borrowings route next quarter.

The company had raised $75 million in ECBs since the troubled NBFC were allowed to raise money through this route earlier this year.

The landed cost of overseas money is much than domestic funds, Joshi explained.

Tata Capital, the parent company of Tata Capital Financial Services, has raised $200 million in ECBs across businesses till now and is also looking for a similar fund raising for its cleantech business, Sabharwal said.

He said right costs through rates and right tenors is the focus for Tata Capital in its borrowings, and made it clear that they would reduce reliance on the short-term money market instruments like commercial papers.

At present, half of its liabilities come from non- convertible debentures, 35 per cent from bank borrowing and rest from CPs and ECBs.

Joshi said the idea is to increase the share of ECBs up to 5 per cent by March, and Sabharwal also made it clear that they intend to borrow more from foreign sources.

The forthcoming NCD issue, through which it plans to raise Rs 4,126 crore, is spread across tenors in the range of three to 10 years, and a bulk of it is secured.

The issue comprises a basic target of Rs 500 crore and a greenshoe option to retain subscriptions of up to Rs 3,626 crore. A bulk of the proceeds will be used for on-lending.

They carry interest rates in the range of 8.35-8.85 per cent, and will be hitting the market from August 13.

The company had last raised Rs 3,400 crore from the NCD route in September 2018.

Published on August 08, 2019
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