Tata Sons to raise Rs 2,000 cr through debentures

Tata Sons Limited, a principal holding company of Tata group, is planning to raise Rs 2,000 crore through non-convertible debentures (NCDs) to support business operations. The rating “AAA” for NCDs reflects Tata Sons' exceptional financial flexibility and strong financial risk profile, supported by the company's comfortable liquidity and a sound capital structure, CRISIL said in statement. These rating strengths are partially offset by Tata Sons' increased participation in Tata group companies' investment programme. Its business risk profile will also depend on the success of these investments. The Tata group has been expanding its business presence through both organic and inorganic means, resulting in large funding requirements across group companies. Tata Sons' financial flexibility arises from its ability to raise additional funds by sale or pledge of its large portfolio of investments, mainly equity shares in Tata Consultancy Services Ltd (TCS). As on February 23, 2017, the 73.26 per cent holding in TCS had a market value of more than Rs 3.5 lakh crore. Future & Option Trading Tips

On February 21, 2016, the software services company announced a buyback of shares worth Rs 16,000 crore. Under the programme, TCS will repurchase 56.1 million shares (2.85 per cent of its equity) at Rs 2,850 apiece. The company has comfortable liquidity and a sound capital structure. It remains adequately resourced, which together with regular dividend income primarily from its holding in TCS provides high cash flow adequacy for debt servicing. As on September 30, 2016, the cash and cash equivalent was around Rs 4,200 crore. In financial year 2016, profit after tax (PAT) was Rs 3,010 crore on total revenue of Rs 8,100 crore. The PAT for financial year 2015, was Rs 9,060 crore on total revenue of Rs 13,210 crore. In six months of financial year 2017 (ended September 2016), PAT was Rs 5,080 crore on total revenue of Rs 7,603 crore. Referring to the recent appointment of N Chandrasekaran as executive chairman of Tata Sons, CRISIL said that there is no immediate impact on the business and financial risk profile of Tata Sons or any of the group companies (rated by CRISIL) due to the change of chairmanship. Prior to moving to Tata Sons, Chandrasekaran was chief executive and managing director at TCS. Financial Astrology Tips