Tata Capital Financial Services plans to raise up to Rs 11,500 crore

Tata Capital Financial Services, the unlisted subsidiary of Tata Capital, is planning to raise up to Rs 11,500 crore as debt to bolster its lending book that touched Rs 75,806 crore in FY21.

According to banking sources, the board of Tata Capital Financial Services will be meeting on September 6 to clear the issue. The fundraise by Tata Capital Financial Services comes within weeks of Tata Sons, the holding company of the Tata group, informing its shareholders that it plans to raise up to Rs 40,000 crore as debt in the coming months.

The fundraising by Tata Capital Financial Services comes just before the festival season when the company is expecting a substantial rise in demand for loans from its retail as well as corporate customers. Bankers said the funding costs for high-rated NBFCs like Tata Financial Services have come down significantly. With the retail borrowers splurging on two-wheelers, passenger vehicles, and taking personal loans, the demand for Tata Capital Financial Services products would increase. Its products are also expected to be sold through the Tata Super App planned by the Tata group.

Tata Sons has already infused Rs 3,500 crore in Tata Capital Group in the last two financial years so that the company can meet its financial liabilities. Tata Sons holds a 95 per cent stake in Tata Capital, which, in turn, holds the entire equity of Tata Capital Financial Services.

According to Tata Capital Financial Services filings, its total loan portfolio was at Rs 44,084 crore as of March 31, as compared to Rs 43,551 crore as on March 31, 2020.  Of this, 52 per cent of the loan book consisted of wholesale loans with the balance comprising retail loans.  

Tata Capital Financial Services made a profit of Rs 678 crore in FY21, as compared to Rs 114 crore in FY20. Its parent Tata Capital reported revenues of Rs 10,102 crore in FY21 and a profit of Rs 1,300 crore.