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According to sources, the Mumbai-based company has raised S$350 million (Rs 1,545 crore) through a S$-denominated Regulation S bonds (Reg S) bond sale at an annual coupon rate of 4.25 per cent.
This is the second fund raising activity by the company in less than five months. In January, its subsidiary, Jaguar Land Rover Automotive, had raised $500 mn (Rs 2,750 crore) through senior debt.
Tata Motors would be the third Tata Group company to raise funds by issuing S$ bonds in 2013. Tata Communications raised S$250 mn (Rs 1,100 crore) in January and Tata Steel raised S$300 mn (Rs 1,300 crore) last month.
TML Holdings Pte, Singapore, a subsidiary of Tata Motors, is involved in the fund raising. The issue will comprise Reg S for a five-year maturity tenure, say sources. When asked, Tata Motors declined to comment.
From information disclosed by Tata Motors, by the end of the third quarter (December 31, 2012) the company had cash, bank balance and mutual funds holdings of £2.1 billion and undrawn committed credit facilities of £1 bn.
On an average, Tata Motors invests Rs 2,500-3,000 crore every year towards capital expenditure, of which a major chunk is for new product development. However, this pales in comparison to investment planned by JLR, of £2.75 bn (Rs 22,825 crore) for the current financial year.
Tata Motors reported its lowest net profit in three years in the third quarter of 2012-13. At the standalone level, the company recorded its first net loss in four years, hit by a sharp slowdown in demand for heavy trucks and passenger cars during the same quarter.
Despite the negative demand outlook, Tata Motors had said it would go ahead with planned spending of Rs 2,500-3,000 crore on new product development and capital expenditure. On the commercial vehicle front, it is on course to launch several variants and new models, from micro trucks to heavy duty trucks and buses, in the coming months.
CAPITAL FUNDING
* This is the second fund-raising activity by the company in less than five months
* In January, subsidiary Jaguar Land Rover Automotive had raised $500 mn (about Rs 2,750 cr) through senior debt
* Tata Motors would be the third Tata Group company to raise funds by issuing Singapore dollar bonds in 2013
* TML Holdings Pte, Singapore, a subsidiary of Tata Motors, is involved in the fund raising plan
* The issue would comprise Regulation S bonds , for a five-year maturity tenure
