Tata Capital, a subsidiary of Tata Sons, is discussing with lenders to raise around 10,000 crores through debt for its on-lending purposes. A banking source stated that the debt fundraising in the current quarter would aid Tata Capital in growing the balance sheet of the merged entity. The Board of Directors of Tata Capital Financial Services Limited (TCFSL) has sanctioned the merging of TCFSL, a wholly-owned subsidiary of Tata Capital, and Tata Cleantech Capital, an 80.5% owned subsidiary of TCL, with TCL.
As per a banker, Tata Capital is becoming more aggressive in the retail loans segment, with most of the funds raised this quarter intended for home loans and personal loans. The Reserve Bank of India (RBI) has identified the company as an upper-layer non-banking financial institution (NBFC), requiring it to be listed within the next two years.
Tata Motors Finance, another sprawling financial services business under Tata Motors, providesicle, and dealer financing. Analysts predict that due to the significance of the financial services business to the Tata Group, and as Tata Sons plan to keep TCL adequately capitalized, Tata Sons will continue to provide equity support to help Tata Sons maintain a comfortable capitalization and liquidity profile. Tata Sons invested around 2,500 crore in FY19 and a further 1,000 crore in the fourth quarter of the financial year ending March 2020.
According to data submitted with the rating firms, TCFSL’s loan portfolio amounted to approximately 59,716 crores as of September 30 last year, compared to about 55,323 crores as of March 31, 2022. A Tata Capital spokesperson declined to comment when contacted.
