Tata Capital to raise Rs. 20K crore to boost core lending biz

Tata Capital Limited’s (TCL’s) board has greenlit a fundraising exercise of Rs 20,000 crore through non-convertible debentures (NCDs). This capital will be channelled into the company’s core lending business and is separate from the Rs 8,000 crore fundraising plan of its home finance subsidiary, Tata Capital Housing Finance.

Tata Capital, a subsidiary of Tata Sons Private Limited, the holding company of the Tata group, currently encompasses Tata Capital Housing Finance, Tata Securities, and Tata Capital Pte Singapore and its subsidiaries. The debentures will be issued on a private placement basis once Tata Sons approves the fundraising plan, with the option for Tata Capital to raise the funds in one or more tranches.

Among major bond issuances by Indian companies, according to Bloomberg data, HDFC Bank tops the leaderboard; it had raised Rs 25,000 crore in February last year. Piramal Housing Finance had raised Rs 20,455 crore in August 2016, while Reliance raised Rs 20,000 crore via bonds in November 2023.

With the financial services sector gaining momentum, Tata Sons invested Rs 1,000 crore in the first half of the current fiscal year (FY24) by subscribing to the rights issue of equity of TCL. This followed an infusion of Rs 500 crore during FY23. Previously, Tata Sons invested Rs 1,000 crore in FY20, and Rs 2,500 crore in FY190. The group has earmarked financial services as a core business, supporting it with fund infusion and intra-group business.