Tata Steel Announces ₹3,000 Crore Fundraising via NCDs
Tata Steel has announced plans to raise ₹3,000 crore through the issuance of non-convertible debentures (NCDs) via private placement, as confirmed during the company’s board meeting held on February 14, 2025. The steel giant intends to issue 3,00,000 NCDs, each with a face value of ₹1,00,000, targeting eligible investors.
The tentative date for the allotment of these NCDs is February 21, 2025, and the bonds will mature on February 21, 2030. Tata Steel has also expressed its intention to list these NCDs on the wholesale debt market segment of the Bombay Stock Exchange (BSE). The bonds have been assigned credit ratings of ‘AAA’ by India Ratings and ‘AA+’ by CARE Ratings, indicating a strong level of security for investors. India Ratings recently upgraded Tata Steel’s bonds to the highest ‘AAA’ rating, reflecting the company’s improved outlook, particularly for its UK operations. This upgrade is based on the expected reduction in losses from Tata Steel’s UK assets, which the company plans to break even by the second half of FY26. In September 2024, Tata Steel shut down its blast furnaces in the UK, a move that is expected to lead to more stable operations in the coming years.
However, India Ratings has highlighted that any higher-than-expected capital expenditure on UK assets will be a key area of focus. Tata Steel’s recent performance has been robust, and it continues to maintain strong financial flexibility, supported by its sponsor, Tata Sons Private Limited. Despite the announcement of this fundraising initiative, Tata Steel’s shares on the BSE ended the trading day down by 1.32%, closing at ₹134.40, lower than its opening price of ₹136.20. The stock touched a high of ₹139.20 and a low of ₹133.35 during the session. In total, Tata Steel has outstanding bonds exceeding ₹12,800 crore, with ₹670 crore of debt due to mature next month. The latest NCD issuance is part of the company’s broader strategy to manage its debt and strengthen its financial position.
