Tata Sons looks to monetise assets, raise foreign loans in FY23

Tata Sons, the holding company of the Tata group, plans to raise funds by monetising its unlisted companies, and through foreign loans and dividends from its listed subsidiaries in financial year 2022-23 (FY23), as debt worth Rs 16,305 crore is coming up for repayment in the current fiscal, say banking sources.

The company’s net debt was Rs 30,327 crore, while its cash and liquid investments were Rs 2,410 crore as of February end, according to banking sources. This was marginally higher than Rs 27,616 crore of net debt reported in FY21. The figures for the entire FY22 are not available.

The net debt of Tata Sons does not include the funds raised by its subsidiaries in the previous year. 

Talace, which acquired Air India last year, and Tata Digital, which is leading the e-commerce initiatives, have raised debt with Tata Sons’ backing.

“In the past, Tata Sons had raised funds through foreign loans and participated in the buyback of shares by TCS to support its financing requirement. We expect this trend to pick up in the new financial year as almost half of its net debt is due for repayment in the year,” said the source close to the development.

Tata Sons did not reply to an email query.

According to banking sources, Tata Sons infused an additional Rs 2,500 crore into Tata Teleservices, its loss-making telecom services arm, so that the latter could repay its debt. Tata Sons is also supporting its aviation arms by buying back shares of AirAsia India from their Malaysian partner, Air Asia, and infusing additional cash in Tata Sia Airlines. It used proceeds worth Rs 13,000 crore from the sale of its stake in TCS to repay debt in FY22 and to infuse funds in various arms, including the financial services and real estate ones.