PUNE (Metro Rail News): Tata Sons, the holding company of the Tata group, is investing Rs 975 crore in Pune IT City Metro Rail, a special purpose vehicle that obtained the contract to build, operate, and maintain the project between Shivaji Nagar and Hinjewadi in the city.
74% of the SPV is owned by Tatas, and the other 25% is owned by Siemens Project Ventures. According to a financial source, the 23-km of Rs 7,420-crore project is being financed with a debt-to-equity ratio of 1.8 times, the full debt has been secured, and Tata Sons is supporting the planned equity participation. The Maharashtra and Union governments each have a 50% share in the development of the Pune metro rail.
Tata Sons, which had standalone debt of Rs 30,000 crore as of March this year, is planning to raise funds via issuing non-convertible debentures. Tata Sons are also looking at listing its satellite TV broadcasting arm, Tata Play, to raise around Rs 3,200 crore.
According to bankers, Tata Sons is concentrating on enhancing the profitability of its digital, electronics, and aviation businesses. Some entities, such as the Pune metro SPV, may need investment from Tata Sons as growth capital because TRIL is concentrating on retiring its debt. Tata Sons are likely to seek out extra debt financing for these projects in addition to spending its own cash, which is anticipated to come in the form of dividend income in the current fiscal year,
Tata Sons, as of March had a standalone debt of Rs 30,000 crore and intends to raise money by issuing non-convertible debentures. Tata Sons are also considering offering Tata Play, its satellite TV broadcasting division in order to raise about Rs 3,200 crore.
“Tata Sons also owns stakes in profit-making insurance companies and may look at raising funds by selling part of their stakes,” the banker said.
TRIL is planning to sell its recently commissioned roads and ropeway projects to raise funds and retire its own debt.