Tata Capital, the Tata group’s financial services firm, is planning to raise ₹15,000 crore ($1.72 billion) through debt including issuing green bonds and non-convertible debentures. The board of directors of the company cleared the fund raise plans early this month.
Tata Capital, which is facing the Reserve Bank of India’s (RBI’s) deadline to get its shares listed by September this year, will use the proceeds for on-lending purposes and business operations.
Funds raised by green bonds are lent for projects like renewable energy, energy efficiency, or clean transportation etc.
The twin issues were cleared by the board on February 6th including raising ₹10,000 crore by way of green bonds, market linked NCDs on a private placement basis.
Another ₹5,000 crore is to be raised by issuing secured redeemable NCDs with a liquidity window facility, as per company’s filings.
Tata Capital did not comment on its fundraising plans.
In June last year, the boards of Tata Capital and Tata Motors Finance approved the merger of the latter into TCL. This merger has now received approval from the Reserve Bank of India and the respective lenders of both companies.
According to rating firm Fitch Ratings, Tata Capital is designated as an ‘Upper Layer’ NBFC by the RBI and is subject to higher regulatory requirements, including a public listing by September. The public issuance would improve the company’s capital base and further reduce leverage, it said, adding that Tata Sons, which currently holds 93 per cent stake in TCL is unlikely to dilute below 75 per cent stake in the planned IPO.
After Tata Capital’s merger with Tata Motors Finance (TMFL), TMF Holdings (a core investment company owned by Tata Motors) will hold a 4.7 per cent stake in the merged entity.
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