Tata Motors Ltd’s board on Tuesday approved the company’s proposal to raise Rs 1,000 crore through issuance of 10,000 rated, listed, redeemable non-convertible debentures or NCDs with a face value of Rs 10 lakh each.
The company plans to raise the amount in three tranches of Rs 500 crore, Rs 300 crore and Rs 200 crore on a private placement basis, it said in a regulatory filing. The first tranche will be raised by issuing NCDs with a tenure of 875 days with redemption on 30 September. The following tranches of Rs 300 crore and Rs 200 crore would be raised via NCDs of duration of 934 days and 965 days respectively.
Analysts said automakers have been raising capital lately via issuance of debentures to ensure liquidity is maintained as revenues have dwindled following near zero sales during the lockdown. Mahindra & Mahindra Ltd plans to raise Rs 1,000 crore via NCDs. TVS Motor Company Ltd and Motherson Sumi Systems Ltd also plan to raise Rs 500 crore each via the debt instrument on a private placement basis.
Auto companies such as Maruti Suzuki India Ltd, Hyundai Motor India Ltd, M&M, Hero MotoCorp Ltd, Bajaj Auto Ltd and others reported nil sales in the domestic market for April. However, the companies managed to export some volumes as operations across shipping ports resumed business after April 20.
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