The Tata Sons Ltd on Friday discussed on the various possible avenues to raise the capital to pay off its loans of Tata Teleservices and also to invest in group’s developmental and infrastructure projects. Tata group who are known for their charity and supporting government schemes are now approaching international markets to raise funds.
BNP Paribas, First Abu Dhabi, ANZ, Bofa ML, Citi bank, CA-CIB, EDC, Mizuho, MUFG Bank, Stanchart, and State Bank of India are the bankers they approach for this facility. The company is planning the fund raise to finance a fresh equity infusion into group companies including Tata Motors Ltd and Tata Power Ltd. The Tata Power is working on a strategic turnaround plan to fix the issues of the company and to improve the capital structure of the company. Tata powers recently sold three ships for $212.8 million, the second asset sale after the divestment of its stake in cennergi in South Africa for around $110 million.
The revenues of Tata motors and Tata power were affected in India and other parts of the world due to the outbreak of the covid-19 pandemic. The corona virus pandemic which was started in china has hit the business and sales of the world’s biggest auto market and also affected the supply chains affecting car makers in all parts of the world.
Tata motors has struggled with weak sales in the past few months leading to a loss of ₹9894 crore in the march quarter of 2020. The company’s Indian business has no equity value left leading to rising new debt levels. The company’s luxury car unit Jaguar Land Rover is the only driving factor of the firm’s valuation as revenues from JLR contributed to nearly 79% of its consolidated sales but the domestic vehicle revenue had fallen 32% a year. This is the first time since 2007 Tata motors have been taping the international markets to raise its funds. Tata motors said that the funds will be raised in both rupee and dollar. Tata sons, which holds substantial stake in the group’s profit, Tata Consultancy Services can raise funds at a much cheaper rate than the Tata Teleservices due to its far better Financial Metrics. Tata Teleservices, sold its wireless telephony business to airtel for free and plans to merge its enterprise business with Tata Communications.
Apart from Tata sons, Tata group is also trying to raise funds up to $275 million from the overseas market. The company will use the funds to refinance an old loan.
