Tata Sons is planning to raise Rs 400 crore through several tranches of non-convertible debenture issues.
Executives at the credit rating agency Crisil stated that the money is being raised to meet the working capital requirements of Tata Sons.
Market sources feel that since the latter is a holding company, the funds will be used to increase the stake of the Tatas in their group companies.
Meanwhile, Tata Industries has firmed up plans to raise Rs 100 crore through private placement. According to a merchant banker, Tata Industries is planning to offer 13.10 per cent for a seven-year paper. The investors will have an option to redeem the instruments at the end of the fifth, sixth and seventh year.
Sources said bond instruments of Tata Industries are not rated. Tata Sons has been awarded a AAA rating from Crisil for the Rs 400 crore non-convertible debenture programme. Crisil has also reaffirmed AAA rating to the six bond issues of the company issued earlier and amounting to Rs 360 crore.
Crisil said the triple A rating continues to reflect the business strength and the strong cash flows from the company's largest division - Tata Consultancy Services leading to a favourable financial position for Tata Sons. The rating also takes into account Tata Sons status as the principal promoting company of Tata group of companies.
Meanwhile, the fixed deposit scheme of Tata Sons is reaffirmed to FAAA. Tata Industries raised Rs 200 in January 1998 through a private placement of seven-year exchangeable premium bonds, each exchangeable into 10,000 shares of Tata Teleservices Ltd every 6 months after 3 years. The implied yield on the bonds was 15.10 per cent if not converted. The bonds had a put and call option after five and seven years. trations
