By Khushi Malhotra and Dharamraj Dhutia
MUMBAI (Reuters) – India’s Tata Steel is set to tap the corporate bond market after a gap of nearly one year, two sources familiar with the matter said on Thursday.
“The company is already in talks with merchant bankers and investors, and is offering a variety of tenors, and would finalise one or two of those, based on levels that they get,” one of the sources said.
Tata Steel is likely to raise around 30 billion rupees ($345.6 million) through this bond issue and will likely complete the issue before the end of this month.
The company is flexible in terms of tenor and is in discussion for bonds with three-year, five-year, seven-year or even 10-year maturity, the other source said.
Both the sources requested anonymity as they are not authorised to speak with the media.
Tata Steel did not immediately reply to a Reuters email seeking comment.
Recently India Ratings has upgraded the bonds of the steel company to the highest grade of AAA from AA+.
“The ratings factor in the strategic linkages between TSL and its sponsor, Tata Sons Private Limited and the strong financial flexibility of Tata Sons,” India Ratings said in a note dated February 11.
The upgrade also reflects the likelihood of reduced losses at Tata Steel’s U.K. operations over the next two financial years and eventual profitability, the ratings agency added.
The company has outstanding bonds worth more than 128 billion rupees, of which 6.70 billion rupees of debt is due to mature next month.
Tata Steel last tapped the bond market in March 2024, when it raised 27 billion rupees through bonds maturing in three years at a coupon of 7.79%.
($1 = 86.8020 Indian rupees)
(Reporting by Khushi Malhotra and Dharamraj Dhutia; Editing by Eileen Soreng)
