Tata Motors, a leading blue-chip auto company, announced on Thursday, March 27, that its board had approved the allotment of 2,00,000 non-convertible debentures (NCDs) worth ₹2,000 crore on a private placement basis. This move is part of the company’s ongoing efforts to bolster its financial position.
The company detailed in a filing that the Board constituted Committee approved the allotment of the NCDs, each with a face value of ₹1,00,000. The NCDs will be issued in multiple series/tranches and are set to be listed on the National Stock Exchange (NSE). The debentures have been assigned an AA+/Stable rating by Crisil, indicating their relatively low risk.
The allotment was made across three tranches. In Tranche I, 50,000 NCDs were allocated to HDFC Bank, while Tranche II saw allocations of 10,000 NCDs to Reliance General Insurance Company and 60,000 NCDs to BNP Paribas. Tranche III involved the issuance of 2,500 NCDs to Care Health Insurance, 52,500 NCDs to HDFC Bank, 5,000 NCDs to Reliance General Insurance Company, and 20,000 NCDs to SBI Short Term Debt Fund.
The company had earlier approved the issuance of these NCDs with a coupon rate of 7.65% on March 19.
Despite this positive fundraising update, Tata Motors faced significant challenges in the stock market. Its shares saw a sharp decline, dropping as much as 6.5% during the trading session, and settling at ₹668.60, a 5.56% drop from the previous day’s close. The slump came after US President Donald Trump announced the imposition of 25% tariffs on all imported cars and auto parts, effective from April 2. This development is particularly concerning for Tata Motors, as the US is a key market for its Jaguar Land Rover (JLR) luxury cars, which could face higher costs due to the tariffs.
This setback is compounded by a slowdown in domestic sales, adding further pressure to the company’s stock performance.
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