Tata Capital gains after board approves up to Rs 36,000 crore NCD issuance

Shares of Tata Capital traded in the green on Wednesday after the company said its board had approved a proposal to raise up to Rs 36,000 crore through the issuance of non-convertible debentures (NCDs) on a private placement basis.

The stock was trading at Rs 341.65 at 1:39 PM, up 0.75 per cent or Rs 2.55 from the previous close. The counter has been on a strong run in recent weeks, gaining nearly 13 per cent over the past month. Over the last six months, the stock has risen about 4.7 per cent, while remaining marginally higher on a year-to-date basis.

Board approves Rs 36,000 crore fundraising plan

In a regulatory filing, Tata Capital said its board had approved raising up to Rs 36,000 crore through the issuance of non-convertible debentures, subject to shareholders' approval.

The proposed fundraising will be carried out through private placements in one or more tranches. The company said the borrowing programme could include a mix of secured and unsecured NCDs, subordinated debt, perpetual debt instruments, market-linked redeemable debentures and green bonds.

The approval gives the company flexibility to tap different segments of the debt market depending on funding requirements and prevailing market conditions.

Shareholder nod awaited

The company clarified that the fundraising proposal will require shareholders' approval before any issuance can take place.

Following shareholder clearance, the terms of individual issuances, including interest rates, tenure, security structure and other conditions, will be determined at the time of each tranche and detailed in the relevant offer documents.

"Post the approval of the shareholders, the issuance of Debentures will be made on terms including the rate of interest, tenor, security, etc., as per the letter of offer(s), information memorandum(s), offer document(s), general information document(s) and key information document(s) as may be issued by the company from time to time," Tata Capital said in its filing.

Wide range of debt instruments planned

The proposed borrowing programme covers multiple categories of debt securities.

Apart from conventional secured and unsecured debentures, Tata Capital may also issue subordinated debt and perpetual debt instruments. The company has additionally kept the option open to issue market-linked redeemable debentures, whose returns are linked to specified market benchmarks.

The approval also includes green bonds, reflecting growing investor interest in sustainable financing instruments.

Funding to support business growth

As one of India's largest non-banking financial companies, Tata Capital regularly accesses debt markets to meet funding requirements and support lending operations.

The proposed fundraising programme is expected to strengthen the company's capital-raising flexibility and provide access to long-term funding across a range of instruments.

The move comes amid continued growth in credit demand across retail and corporate segments, prompting financial institutions to secure diversified funding sources.

Stock remains in focus

Investors will now watch for shareholder approval and further details on the timing and structure of the proposed issuances.

The announcement also comes at a time when Tata Capital remains in focus due to expectations surrounding its future growth plans and broader developments within the Tata Group's financial services business.

With the board approving one of its largest debt fundraising programmes, the company has positioned itself to access capital markets as and when funding opportunities arise.