Tata Capital Limited, a renowned financial and investment service provider in India, is in the headlines for planning to raise Rs. 28,000 crores through debt. Established in 2007 in Mumbai, the company has over 100 branches across India. The company is a financial arm of the $108 billion worth Tata Group, a renowned business conglomerate.
Since its inception, the company has been performing well and earned revenue of Rs. 13,673 Cr in FY23 against Rs. 10,253 Cr in FY22. To boost its business operations, the company raises funds from its investors, businessmen, or government. Tata Capital's decision to raise Rs. 28,000 crores via debt will surely impact its investors, but how? If you want to buy Tata Capital unlisted shares, you must know how the fund raised will impact you as an investor. Stride along to read.
Tata Capital To Raise Rs. 28,000 Cr Via Debt In FY24
Backed by Tata Sons, Tata Capital plans to raise Rs. 28,000 Cr ($3.38 billion) via debt in FY24. The company will get this amount mainly via debt instruments and bank lines in the current financial year due to its double-digit credit growth, as said by the top executive at the non-banking finance company (NBFC). As per the statement, it is clear that the company is focusing on digital credit growth.
Rajiv Sabharwal, Managing Director and CEO of Tata Capital, in an interview with Reuters, said, "We try to remain granular and well spread out on our liabilities, whether it is bank funding, NCDs (non-convertible debentures), external commercial borrowing, or public debt issues." Highlighting the same topic, he said that if the credit is expected to grow at around 15%, they will try to grow AUM (assets under management) by more than 25% because their liabilities have to match that.
As per the Financial Express report, India's overall bank credit has been growing at a rate of 15% in recent months. This reflects the steady demand for funds from corporations among the world's fastest-growing economies.
The Impact Of Debt Raise On The Investors
Here are a few points on how Tata Capital fundraise will impact its existing and new investors.
Interest Payments
Whenever a company raises funds via debt, it generally includes paying interest to lenders and bondholders. Therefore, higher interest paid by Tata Capital will significantly impact the company's overall earnings, which might also affect its ability to pay dividends to its investors.
Stock Price
The debt can impact the company's stock price, directly impacting investors' decisions. If the funds are used for strategic investment, investors will view it positively as it will generate a high return on their investment. If Tata Capital fails to repay debt, its stock price will decline, which will create a negative impact on its investors.
Future Investments
If Tata Capital raises funds for business expansion, acquisition, and other growth initiatives, this might boost the profitability of the business. Thus, it will attract new investors to buy Tata Capital unlisted shares. This is seen as a positive impact on the investors.
Company's Aim To Enter Wealth Management Business
Tata Capital has three NBFC subsidiaries - Tata Capital Housing Finance, Tata Capital Financial Services, and Tata Cleantech Capital. The managing director of the company, Rajiv Sabharwal, said that the company will not increase its exposure to corporates rated AA and below.
He also said that the company aims to expand its wealth management business and foray into education financing this year. With this goal, they are looking to add 200 more branches this fiscal year to more than 500 branches. This robust step of the company towards the wealth management business shows positive signs of the company's performance in the future.
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FAQs
Is Tata Capital an excellent company to invest in?
Ans. Tata Capital is a subsidiary of Tata Sons. It is a trusted, customer-centric, one-stop financial solution partner offering a range of financial services to people in this sector. Tata Capital is a great company to invest in if you're looking to earn high ROI.
What is Tata Capital unlisted share price in India?
Ans. Tata Capital pre-IPO shares are available at Rs. 475 per equity share. The prices fluctuate depending on the company's performance and market trends.
How much revenue did Tata Capital earn in FY23?
Ans. The total revenue the company earned in FY23 was Rs. 13,637 Cr. against Rs. 10,253 Cr. in FY22.
How do I buy Tata Capital unlisted shares?
Ans. You can buy Tata Capital pre-IPO shares at Stockify. With our platform, you will face no difficulty in buying and selling unlisted shares of any pre-IPO company in India.
Where do I check the daily price of Tata Capital unlisted shares?
Ans. At Stockify, we regularly update the prices of unlisted shares of top pre-IPO companies in India. Our expert brokers update the prices based on the company's performance and market fluctuation. To know about the share prices, you can stay tuned to our portal.
