JLR success helps Tata Motors borrow in dollars

Tata Motors Ltd is cashing in on the success of its Jaguar Land Rover Ltd (JLR) unit to borrow dollars as it refinances in the face of sliding domestic sales.

India’s biggest carmaker hired banks to arrange a $500 million loan facility last week, the first international fundraising since its Jaguar unit sold a 10-year bond in January. The cost of insuring the debt of Tata Motors fell 44 basis points last month, the most of any Indian company, and compared with a 56 basis point drop for Jaguar and 34 for Ford Motor Co. Tata Motors debt-to-earnings ratio has been rising since 2011.

The success of Tata Motors’ overseas luxury vehicle sales has boosted the company’s profit even as revenue from domestic brands slides. The offshore income streams make borrowing in dollars less risky for the car-making arm of Tata Sons Ltd, the country’s largest industrial group, as back-to-back increases in the Reserve Bank of India’s (RBI’s) benchmark rate make rupee financing more expensive.

“The leverage may look at bit stretched at the moment, but JLR has been supporting the earnings of the company, allowing Tata Motors to raise debt,” Hemant Dharnidharka, Bangalore-based head of credit research at SJS Markets, said in a 1 November phone interview. “Because of a back-stop support from the parent Tata Sons, this company has access to a lot more bank financing than other companies could.”

Comments

Reliance's JioMart is averaging half a million orders per day; WhatsApp driving growth

JioMart , Reliance's online-to-offline commerce platform that launched in May , has scaled up rapidly, riding on the pandemic-fuelled digital acceleration. The service, which went live in 200 cities across India, is currently processing an average of 500,000 orders per day. " We can go even higher on peak days", Jio Platforms CEO Kiran Thomas revealed at the Facebook for Fuel India 2020 event. He said, "JioMart is empowering millions of kiranas and small merchants through the simple and secure platform of WhatsApp, and linking them to Reliance Retail's pan-India supply chain. We expect to grow manifold in future, and are optimistic about enabling new cohorts of users and making it easier for them to shop for daily essentials." "Customers are transacting seamlessly on JioMart and the conversational nature of the service enabled by WhatsApp has made people adapt to it intuitively," he added. Reliance also stated that it will continue t

Stock broker SMC Global files for IPO

F inancial services company SMC Global Securities has filed draft red herring prospectus with SEBI for public issue of 1,58,67,380 equity shares of face value of Rs 2 each. The issue comprises a fresh issue of 79,33,690 equity shares by the company and an offer for sale of 79,33,690 shares by Millennium India Acquisition Company Inc. As of September 30, 2012, "We service our broking clients through a network of 43 branches and 2,521 registered sub-brokers and authorized persons spread in more than 500 cities and towns. We have also established an office in Dubai for brokerage and trading activities in that region," the company said. SMC has reported a loss of Rs 0.42 crore and total revenues of Rs 292.24 crore in the year ended March 31, 2012. "The proceeds of the fresh issue shall be utilised for margin maintenance with stock exchanges; part repayment of term loan; investments into subsidiary, SMC Comtrade; and general corporate purposes," according to p

TCS merger with TCS e serve

The board of Tata Consultancy Services (TCS) in its meeting on 18 October 2012 has approved the composite scheme of arrangement between TCS, TCS e-Serve (e-Serve) and TCS e-Serve International (TEIL). The composite scheme of arrangement provides for merger of e-Serve into TCS and demerger of TEIL's special economic zone (SEZ) undertaking(s) to TCS. The appointed date proposed for this scheme is 01 April 2013. TCS holds 96.26% of the paid up equity share capital of e-Serve. TEIL is a wholly owned subsidiary of e-Serve. As per the terms of the scheme of arrangement, shareholders of e-Serve (other than TCS) will receive 13 equity shares of Re 1 each of TCS for every 4 equity shares of Rs 10 each of e-Serve held by them. The board has approved the scheme of merger of Computational Research Laboratories (CRL) and Retail FullServe (RFL) with TCS. The proposed appointed date for the merger of CRL is 01 October 2012 and for the merger of RFL is 01 April 2012. Computational Res

Abhishek Securities

Search This Blog