Tata Capital, a wholly-owned subsidiary of Tata Sons, which is registered with the Reserve Bank of India (RBI) as a systemically important non deposit accepting, non banking financial company, has entered the capital markets with a public issue of secured non-convertible debentures (NCDs) on February 2, 2009. The issue will aggregate Rs500 crore with an option to retain over-subscription of up to Rs1,000 crore.
The issue closes on February 24, 2009 or earlier or on such date as may be decided at the discretion of the committee of directors of Tata Capital subject to necessary approvals.
The NCDs have been rated ‘LAA+’ by ICRA and ‘CARE AA+’ by CARE. The rating of ‘LAA+’ by ICRA indicates high-credit quality and low credit risk. The rating of ‘CARE AA+’ by CARE is considered to offer high safety for timely servicing of debt obligations. Such instruments carry very low credit risk. The ratings provided by ICRA and CARE may be suspended, withdrawn or revised at any time by the assigning rating agency and should be evaluated independently of any other rating. These ratings are not a recommendation to buy, sell or hold securities and investors should take their own decisions.
Key highlights of the instrument:
The net proceeds of the issue is proposed to be used for the company’s various financing activities including lending and investments, to repay existing loans and business operations including its capital expenditure and working capital requirements. ICICI Securities, Citigroup Global Markets India and DSP Merrill Lynch are the lead managers to the Issue. Tata Capital Markets is the advisor to the issue.
Praveen P Kadle, managing director, Tata Capital, said, “The debut year for Tata Capital has been consistent with our business and growth plans. Tata Capital aspires to become one of the leading financial services company in India with a global footprint and build a brand which is admired and respected by all stakeholders. . In keeping with our brand proposition, ‘We only do what’s right for you’, we aim to combine genuine care with expertise to give our customers only what we believe is right.. At Tata Capital, we aim to offer world-class financial services to our esteemed customers.”