Tata Capital, arm to raise Rs 1,500 cr via NCDs to build lending biz

TCL to raise Rs 1,000 cr; TCFS to raise Rs 500 cr

Tata Capital and its subsidiary, Tata Capital Financial Services are planning to raise fresh debt of Rs 1,500 crore by issuing bonds to investors. The boards of both companies cleared the fund raising by issuing non-convertible debentures (NCDs) in the last week of January.

Tata Sons has infused Rs 3,500 crore in Tata Capital during the last five years. Of this, Rs 1,000 crore was infused in fiscal 2020 and Rs 2,500 crore was invested by Tata Sons in the fiscal 2019. Tata Sons has not invested in TCL’s equity in the ongoing financial year till date.

Of the fresh fund raising, a banker said Tata Capital will raise Rs 1,000 crore while another Rs 500 crore will be raised by Tata Capital Financial Services. TCL, the flagship of the Tata group's financial services business, owns 100 per cent stakes in Tata Capital Financial Services (TCFSL), Tata Cleantech Capital (TCCL) and Tata Capital Housing Finance (TCHFL). The proceeds of the fresh debt programme will be used to increase its lending book, said a banking source.

For the quarter ended December 2021, Tata Capital Financial Services reported a net profit of Rs 210 crore on revenues from operations at Rs 1,438 crore (see chart). TCFS’s total loan book was Rs 48,037 crore at the end of September 30, 2021 and consists of retail book of 45 per cent and rest in wholesale portfolio.

Banking sources said Tata Sons, the holding company of the Tata group, has also taken its shareholders permission to raise Rs 40,000 crore of additional debt last September and the company is raising funds for its Air India acquisition. The funds for Air India’s acquisition are raised by Talace, another subsidiary of Tata Sons. A banker said Tata Sons is also planning to raise debt via non-convertible debentures and the group is one of the biggest issuers of bonds in the recent years.

Figures in Rs crore				Change in %	Change in %
	Q3FY21	Q2FY22	Q3FY22	QoQ	YoY
Revenue	1,299	1,398	1,438	2.9	10.7
Other income	13	21	20	-6.4	57.2
Finance Cost	705	714	726	1.7	3.0
Impairment of financial instruments	379	185	158	-14.4	-58.2
PBT	135	280	285	2.0	111.4
PAT	111	208	210	0.8	89.1

Source: Company

Compiled by BS Research Bureau