Tata Capital Financial to raise up to Rs 75 billion through sale of NCDs

Tata Capital Financial Services will raise up to Rs 75 billion through sale of non-convertible debentures, including tier-II capital bonds up to Rs 15 billion. The issue will open on Monday.

This would be its first offer to individual investors (as opposed to institutional ones; retail offer is the parlance). It would involve raising of Rs 20 billion (basic issue size) through the issue of three, five and 10-year paper. It can retain over-subscription up to Rs 55 billion. The company finances consumer loans, beside small and mid-size businesses. It is offering a coupon rate between 8.7 and 9.1 per cent, depending on investor class and tenor. Applications need to be in multiples of Rs 1,000, with the minimum subscription at Rs 10,000. The money raised will be primarily used for lending to businesses.

The loan portfolio increased by 14 per cent over a year to nearly Rs 363.2 billion as on March 31. Driven by growth in loan against property, personal loan and business loan products in the retail finance segment, beside bill discounting and channel  financing  in  the  wholesale  segment. Rajiv Sabharwal, managing director and chief executive, says the group till now was depending on other sources for its liabilities but had decided to go to the public for resources. 

As the scale of business grows, the finance company would like to diversify the resources.

He said there was no plan for an initial share offering. It had the backing of the diversified Tata conglomerate, with healthy capital adequacy.

Net profit was Rs 4.83 billion for 2017-18. The ratio of gross non-performing assets to advances was 3.32 per cent, from 4.94 per cent the year before.