Tata Capital, a subsidiary of Tata Sons, is in discussions with lenders to raise Rs 10 billion in debt for re-lending purposes.
The Board of Directors of Tata Capital Financial Services Limited (TCFSL) has approved the merger between TCFSL, a wholly-owned subsidiary of Tata Capital, and Tata Cleantech Capital, an 80.5%-owned subsidiary of TCL.
According to a banking source, the debt financing in the current quarter will assist Tata Capital in expanding the balance sheet of the merged entity.
“Tata Capital is getting aggressive in the retail loans segment and the majority of funds raised this quarter will be for home loans and personal loans,” said a banker.
The Reserve Bank of India (RBI) has classified the corporation as a non-bank financial institution (NBFC) in the upper stratum. Tata Capital, as a top-tier NBFC, is required by the RBI to go public within the next two years.
A Tata Capital spokesperson declined to comment when contacted.
Tata Motors Finance, an expansive subsidiary of Tata Motors that provides vehicle loans and dealer financing, is an intriguing addition to the Tata group’s financial services portfolio.
Due to the significance of the financial services business to the Tata Group and Tata Sons’ intentions to keep TCL amply capitalised, analysts anticipate that Tata Sons will continue to provide equity support to help Tata Sons maintain a healthy capitalization and liquidity profile.
Tata Sons has already invested Rs. 2,500 billion in FY2019 and will invest Rs.
According to information submitted to rating agencies, TCFSL’s loan portfolio stood at Rs. 59,716 crore on September 30 of last year, compared to Rs. As of September 30, 2022, 53% of its loan book consisted of wholesale loans, the majority of which consisted of working capital loans to corporations (35%), bill discounting, and channel financing (15%). The remainder was accounted for by the retail portfolio, which included personal and business loans and automobile financing, among others.
