Bankers said Tata Sons launched its first bond issue in the first week of June to raise Rs 400 crore and followed up with a Rs 250-crore issue this week. Since early this year, it is on a fund-raising spree. It had raised Rs 1,915 crore via non-convertible debentures (NCDs) till April. Tata Sons and other group companies need Rs 7,200 crore to buy back NTT Docomo's 26.5 per cent stake in loss-making Tata Teleservices by this month-end. It had invested Rs 2,500 crore in Tata Teleservices in January to help the company meet its debt commitments.
Though Tata Sons draws its strength from its holding in Tata group companies, yet to fund new projects, it has to rely on debt and dividend income.
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A Tata group spokesperson said: "We do not share information on such matters. Time to time, Tata Sons raises funds as part of its ongoing activities."
Apart from buying back Docomo stake, the holding company is investing in two new airlines in India in association with AirAsia and Singapore Airlines. It had participated in the rights issue of Tata Power and Indian Hotels Company.
Most of Tata Sons' recent investments are being funded by a mix of dividend, interest income, stake sale in investee companies and external borrowings. While rating Tata Sons bonds, ICRA said fresh investments had resulted in an increase in debt over the last few years, though it has remained almost stable.
Tata Sons has strong liquidity supported by adequate cash reserves and ability to raise funds through monetisation of investments, it said.
Besides, with the improvement in the stock market performance, the market value of Tata Sons' quoted equity investments increased substantially. With 50% of the appreciation in the market value of these investments allowed to be added to the net worth for the calculation of capital adequacy as per the guidelines for core investment companies issued by the RBI, the borrowing limit becomes inconsequential for Tata Sons considering the market value of its investments.