Tata Capital Ventures into Global Markets, Targets $750 Million in Foreign Fundraising

In a strategic move, Tata Capital is set to embark on its first-ever foreign fundraising venture, aiming to secure approximately $750 million through offshore bonds or loans in the upcoming fiscal year starting in April. The decision reflects the company’s commitment to diversifying its liability base, as confirmed by Rakesh Bhatia, the Chief Financial Officer at the non-bank financial company (NBFC).

According to Bhatia, Tata Capital is slated to initiate roadshows for the overseas fundraising endeavor by the end of March. He highlighted, “For overseas borrowings, we may also evaluate dollar bonds as there has been a lot of interest by overseas investors in Indian corporates.”

The move comes at a time when fundraising via dollar-denominated bonds by Indian corporates experienced a 14-year low of $4.1 billion in 2023, primarily due to Fed rate hikes pushing U.S. yields – against which these bonds are benchmarked – significantly higher. However, recent months have witnessed a resurgence, with entities like State Bank of India, HDFC Bank, and Shriram Housing Finance collectively raising $2.1 billion via dollar bonds in the first two months of 2024.

Soumyajit Niyogi, a director at India Ratings, a fully owned subsidiary of the Fitch Group, noted, “Indian companies are increasingly tapping overseas markets for fundraising as U.S. yields have eased and there are expectations of rate cuts.”

The move by Tata Capital aligns with a broader trend of Indian companies exploring international markets for funding opportunities. The decision to venture into overseas fundraising underscores the company’s strategic approach to capitalize on favorable global financial conditions.

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