Tata Motors Ltd. is looking to raise debt for the second time in two months via non-convertible debentures, even as the automaker readies for a demerger later this year.
The board of the Tata Group company is scheduled to meet on Friday, May 2, to consider and approve the issuance of rated, listed, unsecured, redeemable, non-convertible debentures on a private placement basis to raise up to Rs 500 crore, according to an exchange filing on Monday.
The company had on March 27 raised Rs 2,000 crore by allotting 2,00,000 NCDs to HDFC Bank Ltd., Reliance General Insurance Co. Ltd. and SBI Short Term Debt Fund and others, in multiple tranches. These were issued at a coupon rate of 7.65%.
A non-convertible debenture is a fixed-income instrument that provides structured returns to investors. As NCDs are unsecured and not backed by assets, the market participants evaluate the issuing company's creditworthy and debt-servicing capacity before allotment.
To be sure, Tata Motors' India business turned net debt-free in fiscal 2024, as did its UK-based subsidiary Jaguar Land Rover in fiscal 2025. The Mumbai-listed company is now on course for a demerger later this year.
On Monday, Tata Motors shares rose 2.06% to Rs 668.35 apiece on the BSE even as the benchmark Sensex ended the day 1.27% higher at 80,218.37 points.
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