Tata Motors: Tata Motors to Increase Rs Rs 1 Billion Through NCDs

Mumbai: Tata Motors said on Tuesday that it will issue Rs 1 billion rupee non-convertible bonds (ENTs), making it the latest in a line of automakers that have been taking the debt route to increase liquidity when Revenue has been frozen due to nationwide movement restrictions.

NCDs would be issued in three tranches, and a special committee of the company’s board is scheduled to meet on May 5, the company said in an exchange document.

The company’s board of directors passed a resolution regarding the fundraiser on March 27, when it also initially approved the division of passenger vehicles in a subsidiary.

Automakers are expected to be particularly affected by the blockade, as vehicle demand may be deferred by consumers as the economy is affected. Its supply chains extend globally, and rebuilding will also take time.

Liquidity deficit is the biggest problem automakers, their dealers, and suppliers face during shutdown, as they still have fixed costs like employee wages, debt obligations, and depreciation assets like manufacturing equipment .

Other auto companies that have raised capital via the debt route or have announced such intentions since the start of the blockade include Mahindra and Mahindra, Apollo Tires and Motherson Sumi.