Tata Motors is raising £1 billion pounds or about Rs 7,300 crore by issuing bonds denominated in dollar and pound sterling, through its overseas subsidiaries under the Jaguar Land Rover umbrella. The money will be used to refinance existing debt and for general corporate purposes. The move comes at a time when JLR’s performance has steadily improved, with rising cash flows allowing it to service debt on its own.
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Tata Motors opens public fixed deposit tap
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Company fixed deposits (FD) were once hot with companies and investors. They enticed investors with slightly higher interest rates and offered a little more to shareholders and investors. But as the fund raising options before corporates increased and India entered into a stable and falling interest rate regime, companies began to close their FD schemes. The main reasons were the slightly higher interest rates, commission to agents, administrative costs and compliance which made it unatttractive.