Tata Capital Housing Finance Limited, a subsidiary of Tata Capital, launched its maiden Non-Convertible Debenture (NCD) issue worth Rs 2000 crore. It is the maiden retail bond issued by the company with a base size of Rs 500 crore. In the NCD issue, Tata Capital Housing also allows investors to retain an oversubscription of Rs 1500 crore. Most rating agencies like Icra and Crisil Ltd provided AAA/Stable ratings to the NCD of Tata Capital Housing. Like any other investment option, the NCD issue also attracted retail investors. As per the reports, this company move also impacted its parent company, Tata Capital share price in the grey market. In this blog, we will discuss Tata Capital Housing NCD in detail.
Details Of Tata Capital Housing Ltd NCD
The maiden public issue by Tata Capital Housing Finance Ltd is regarding the secure and unsecured redeemable NCDs of Rs 2000 crore. As per the recent reports, the lead managers of this NCD issue are A.K. Capital Services Ltd and Edelweiss Financial Services Ltd. Talking about the further details of the NCD, Tata Capital Housing plans to offer four different bonds in different tenure, which is 3,5,8 and 10 years. The range of the coupon shared by the company in the public issue is 7.92-8.70%.
In addition, subscribers of this NCD also have monthly and yearly interest payment options. Tata Capital Housing Finance Ltd also stated that it would use around 75% of funds raised via these bond financing, on-lending, payment/repayment of the debt, and clearing the balance for general corporate purposes. Here are the details of the Tata Capital Housing NCD:
| Particulars | Details Of NCD |
| Issue Size | Rs 500 crore |
| Issue Price | Rs 1000 |
| Market Lot | 10 |
| Ratings By Agencies | AAA/Stable |
| Tenure | 36/60/96/120 months |
| Payment Frequency | Monthly and Annual |
| Series | Series I to Series VI |
This NCD issue will help Tata Capital Housing raise Rs 2000 crore, which will help it stabilise the business. It has a huge importance for the company as its total debt was around Rs 26,120 crore as per the figure shared by the company on 30 September 2019. Tata Capital Housing borrowing comprises 43% from different banks, 20% from the National Housing Bank (NHB), and 15% from bonds.
According to the recent data shared by the company, its total gross Non-Performing Assets(NPA) are worth Rs 400 crore, and its net NPA is Rs 145 crore. So the NCD public issue is vital for the company to clear the debt, borrow and streamline the business operations. From an investor’s point of view, it is an opportunity to invest in NCD of the subsidiary of Tata Capital which currently provides its unlisted shares for trading.
How Will NCD Issue Affect Tata Capital Unlisted Shares?
The NCD public issue by Tata Capital Housing Finance Ltd is expected to affect its parent company, Tata Capital, unlisted shares since it is considered the significant arm of Tata Capital for fulfilling the housing loan needs of the people in rural and urban areas. As per the forecasting reports, investors will notice a change in Tata Capital unlisted share price and demand in the coming years.
Rajiv Sabharwal, Managing Director and Chief Executive of Tata Capital said, “Our Strategy is to bring down the cost of funds, increase loan tenures, and diversify the borrowing.” He also stated that Tata Capital Housing also got a capital infusion from Tata Capital which improved its gearing level to 9.5 times.
It is right to say that all these efforts made by the company are to improve the market condition of its subsidiary and diversify the borrowing. The public issue of NCD will likely positively affect Tata Capital pre-IPO stocks. Since the subsidiary’s performance indirectly benefits the parent company, there are chances that Tata Capital share price will increase in the future. If the volume of investment in NCD remains high, there are chances that it will also affect Tata Capital share price NSE whenever the company goes public.
Invest In Tata Capital For Future Financial Growth
Tata Capital is a non-banking financial service provider trusted by millions in India. It targets the rural and urban areas via its diversified services, which include home loans, corporate loans, etc. In addition, the company has grown the fastest in the last decade and presents investment opportunities via Tata Capital unlisted shares.
You can buy Tata Capital pre-IPO stocks using online trading platforms like Stockify. With the help of it, you can check the updated share price, operational revenue, EBITDA, and other financial figures. Apart from that, you also have an opportunity to invest in Tata Capital Housing NCD, for which you can take assistance from financial experts. All of these investments are subjected to market risk; make sure to analyse the company’s current performance and other metrics before making any investment decision.
