Infopark Properties Ltd (IPL), a subsidiary of Tata Real Estate and Infrastructure Ltd, has raised Rs 1,900 crore through a two-year zero-coupon bond. As part of the TATA Group, the company enjoys financial flexibility.

IPL will own 100% of TRIL Infopark Ltd (TIL), which operates the 4.6 million square feet (MSF) Intellion Park asset in Chennai (IPC). CARE Ratings assigns an ‘A+’ rating to the non-convertible bonds (NCD) with a stable outlook.

Bond traders said the debt of about Rs 1,900 crore will be serviced through cash flow generated by IPC. NCDs will have bullet repayments. A zero-coupon bond is a debt security that pays no interest but trades at a deep discount. This leaves room for a profit at maturity when the bond is redeemed at its full-face value.

The combined debt level of TIL and IPL is expected to increase to close to Rs 3,950 crore by the end of FY23. The rating is supported by IPC’s stable revenue profile, healthy occupancy rates of over 90% over the past four years, strategic location and top-notch quality.

IPC remained at full capacity during FY18-FY20, with a slight decline to around 96% in FY22. This healthy occupancy has translated into stable revenue of over Rs 500 crore over the past four financial years.

Going forward, however, the company’s occupancy rate is expected to slow to nearly 80%. Three tenants, representing approximately 17% of the lettable area, plan to free the occupied space by August 2022.

While such vacancies are expected to moderate the revenue position, IPC will continue to generate revenue of over Rs 500 crore in FY23.

IPC has a strong tenant profile, including multinational companies such as Amazon, AstraZeneca, Citibank, Mindtree, Societe Generale, Genpact, Tata Consultancy Services, etc.