Tata Steel to Raise ₹3,000 Crore via NCDs
Tata Steel has announced its intention to raise ₹3,000 crore by issuing non-convertible debentures (NCDs) through a private placement. The company’s board approved this fundraising initiative during a meeting on February 14.
Details of the NCD Issuance
The company plans to issue 300,000 NCDs, each valued at ₹100,000, to eligible investors. The tentative allotment date for these NCDs is February 21, 2025, with a maturity date set for February 21, 2030. These debentures are proposed to be listed on the wholesale debt market segment of the Bombay Stock Exchange (BSE).
Credit Ratings and Financial Outlook
The NCDs have been assigned a credit rating of ‘AAA’ by India Ratings and ‘AA+’ by CARE Ratings Limited, indicating a high degree of creditworthiness. Recently, India Ratings upgraded Tata Steel’s bonds to ‘AAA’ from ‘AA’ with a stable outlook, reflecting the company’s improved financial position.
Strategic Financial Management
This move aligns with Tata Steel’s strategic financial management objectives, aiming to optimize its capital structure and reduce financing costs. By leveraging the debt market through NCDs, the company seeks to secure long-term funding to support its operational and expansion plans.
Market Performance
On the day of the announcement, Tata Steel’s shares closed at ₹134.40 on the BSE, marking a 1.32% decline from the previous close. The stock experienced an intraday high of ₹139.20 and a low of ₹133.35.
This fundraising initiative underscores Tata Steel’s commitment to maintaining financial stability while pursuing growth opportunities in the steel industry.
