Key Facts:
In the financial year 2024, the daily average secondary bond trading in India was around INR 5722 crores.
Tata Capital Limited is a financial and investment service provider in India and the firm offers consumer loans, wealth management, commercial finance, and infrastructure finance, among others.
Prime Highlights:
Tata Capital successfully raised $400 million through its inaugural international bond issuance.
The bond carries an interest rate of 5.38% with a tenor of 3.5 years.
The pricing was tightened by 33 basis points due to strong investor demand.
Key Background:
Tata Capital Ltd., the financial services arm of the Tata Group, has successfully raised $400 million through its inaugural international bond offering. The senior unsecured bond, which carries an interest rate of 5.38%, has a tenor of 3.5 years. The funds raised will be directed towards supporting the company’s business operations, including lending activities.
In a statement issued late last night, Tata Capital revealed that strong investor interest allowed the company to tighten the bond’s pricing by 33 basis points, from an initial guidance of US Treasury (UST) plus 125 basis points to UST plus 92 basis points. The oversubscription of the bond offering, which saw the final order book more than four times oversubscribed, is indicative of the strong confidence global investors have in the company’s credit profile.
The bond issuance received significant participation from investors in Asia, Europe, the Middle East, and Africa (EMEA), including asset managers, insurance companies, and banks. Tata Capital engaged with global investors in major financial hubs such as Hong Kong, Singapore, and London. The bond offering was jointly managed by BNP Paribas, HSBC, Standard Chartered Bank, and MUFG, with J.P. Morgan also acting as a bookrunner for the transaction.
Rajiv Sabharwal, Managing Director and CEO of Tata Capital, commented on the transaction’s success, noting that it reflects the trust investors place in Tata Capital’s diversified and robust loan book. He emphasized that the funds raised would further strengthen the company’s liability profile and help diversify its funding sources.
This milestone comes shortly after Tata Capital received a ‘BBB-‘ long-term foreign currency issue rating from S&P Global Ratings for its $2 billion medium-term note programme. The new bond offering aligns with the company’s strategy to bolster its capital structure and continue its expansion in the financial services space.