Tata Capital, a leading non-bank financial company (NBFC), is set to embark on its inaugural foray into overseas fundraising, aiming to secure approximately $750 million through offshore bonds or loans in the upcoming fiscal year starting April 2024. The move is part of Tata Capital’s strategy to diversify its liability base and explore new avenues for capital infusion.
Tata Capital, known for its significant presence in the financial sector, is venturing into international fundraising, signaling a strategic shift in its approach. This move is poised to open up new opportunities and strengthen Tata Capital’s financial standing in the global market.
Company Overview:
Tata Capital, a prominent non-banking financial company, operates under the renowned Tata Group. Founded on the principles of trust and financial expertise, Tata Capital has been a key player in India’s financial landscape.
Rakesh Bhatia, the Chief Financial Officer of Tata Capital, shared insights into the company’s diversification plans, stating, “As a part of diversifying its liability base, Tata Capital may evaluate raising up to $750 million through overseas loans or bonds in FY25.” This strategic move marks Tata Capital’s inaugural attempt at overseas fundraising.
Tata Capital is gearing up to commence roadshows for its overseas fundraising initiative by the end of March. The company is considering various options, including dollar-denominated bonds, leveraging the keen interest displayed by overseas investors in Indian corporates.
Market Dynamics:
The backdrop of Tata Capital’s decision involves a broader trend of Indian companies turning to overseas markets for fundraising opportunities. The easing of U.S. yields and expectations of rate cuts have contributed to a resurgence in overseas fundraising. While Indian corporates faced challenges in 2023 due to Fed rate hikes, recent months have witnessed a rebound, with entities like State Bank of India, HDFC Bank, and Shriram Housing Finance collectively raising $2.1 billion through dollar bonds in the first two months of 2024.
Conclusion:
Tata Capital’s strategic move into overseas fundraising underscores the company’s proactive stance in navigating dynamic market conditions. As it evaluates diverse avenues for capital infusion, this initiative is poised to enhance Tata Capital’s financial resilience, foster international partnerships, and fortify its position in the global financial landscape. The success of this endeavor may set a precedent for other Indian companies exploring similar opportunities in the evolving global financial landscape.
