In a strategic move to fortify its core lending operations, Tata Capital Limited (TCL), a subsidiary of Tata Sons Private Limited, announced the green light for a fundraising endeavor amounting to Rs 20,000 crore through non-convertible debentures (NCDs). This financial injection, distinct from the previously announced Rs 8,000 crore fundraising plan of its home finance arm, Tata Capital Housing Finance, aims to bolster TCL's lending activities.
The NCDs will be issued through private placement, pending approval from Tata Sons, with the flexibility for TCL to raise funds in multiple tranches. This development places Tata Capital among prominent bond issuers in India, joining the ranks of HDFC Bank, Piramal Housing Finance, and Reliance, who have executed sizable fundraising ventures in recent years.
With the financial services sector witnessing an upsurge, Tata Sons demonstrated its commitment by injecting Rs 1,000 crore into TCL during the first half of the current fiscal year (FY24). This investment follows earlier infusions totaling Rs 4,000 crore over the preceding years, affirming Tata Group's dedication to nurturing its financial services arm.
Earlier this year, Tata Capital Financial Services and Tata Cleantech Capital were amalgamated into Tata Capital, effective January 1, 2024, marking a consolidation of the group's financial services entities. This restructuring contributed to a robust growth trajectory, with TCL's lending book expanding by 25 per cent, reaching Rs 1,34,762 crore as of September 30, 2023.
Looking ahead, Tata Group plans to list Tata Capital Financial Services, aligning with the Reserve Bank of India's (RBI's) directive to list upper-layer Non-Banking Financial Companies (NBFCs) within three years. This strategic move underscores Tata Group's commitment to transparency and regulatory compliance in the financial sector.
