Tata Capital to issue green bonds, NCDs to raise Rs 15,000 crore

Tata Capital Plans ₹15,000 Crore Fundraise through Debt and Green Bonds Ahead of IPO.

Expert Analysis:

• Fundraising Plan: Tata Capital plans to raise ₹15,000 crore ($1.72 billion) through debt, including green bonds and non-convertible debentures, with board approval.

• Use of Funds: Tata Capital will use the ₹15,000 crore proceeds for on-lending purposes and business operations, ahead of RBI’s September listing deadline.

• Green Bond Purpose: Funds raised by green bonds will be lent for projects in renewable energy, energy efficiency, and clean transportation.

• Fundraising Details: On February 6th, the board approved raising ₹10,000 crore through green bonds and market-linked NCDs, and ₹5,000 crore via secured redeemable NCDs with a liquidity window facility. Tata Capital did not comment on its fundraising plans.

• Merger Approval: In June last year, Tata Capital and Tata Motors Finance approved the merger, which has now received approval from the RBI and respective lenders.

• RBI Designation and IPO Plans: Fitch Ratings designates Tata Capital as an 'Upper Layer' NBFC, subject to higher regulatory requirements and a public listing by September. Tata Sons, holding a 93% stake, is unlikely to dilute below 75% in the IPO.

• Post-Merger Stakeholding: After the merger with Tata Motors Finance, TMF Holdings will hold a 4.7% stake in the merged entity.