Tata Capital to hive off infrastructure business into separate arm

Tata Capital, the financial services subsidiary of Tata Sons, will soon hive off its infrastructure business into a separate subsidiary, said managing director Praveen P Kadle.

The size of the company’s infrastructure finance business currently stands at Rs4,000 crore.

Kadle said the formation of a separate subsidiary will be helpful in raising long-term overseas funds for the infrastructure sector.

“We would be able to raise long term funds through external commercial borrowings route. Otherwise it is very difficult to raise funds for a period of 10-12 years typically needed in the infrastructure space,” he said.

Tata Capital also plans to raise around Rs3,000 crore this fiscal. “We will raise this amount through various long-term and short-term debt instruments and private placements,” Kadle said. He said the company also plans to increase total advances to
Rs15,000 crore from Rs12,000 crore in the previous fiscal.

At the same time, he said, the company will be shortly launching its foreign exchange business as an authorised agent. However, he refused to spell out any timeframe for the same.

The firm is also planning to launch its maiden debt fund in the current fiscal with a corpus of $100-250 million, he said. “We are working on the fund. There would be investors from domestic and international market,” he added.