Tata Motors raises SGD350mn through Singapore dollar bonds - Angel Broking

According to media reports, Tata Motors (TTMT) has raised SGD350mn by issuing five year Singapore dollar bonds at a coupon rate of 4.25% per annum. The money has been raised via TML Holdings Pte, Singapore, a subsidiary of Tata Motors. The money has been raised primarily to meet the working capital requirements and the ambitious capital expenditure plans of the company, primarily on the Jaguar and Land Rover (JLR) front. Earlier in January, TTMT had raised its FY2014 capital expenditure guidance for JLR to GBP2.75bn from GBP2bn earlier. The capex guidance was increased as JLR has accelerated some part of its capex program in UK towards vehicle assembly and the new engine capacity. The company is also targeting to increase the JLR manufacturing capacity from 400,000/year to 500,000/year by the end of FY2014. Additionally, the company also has plans to incur a capital expenditure of Rs. 2,500cr - Rs. 3,000cr at the standalone level. We do not see a material change in company's net debt to equity position post the current bond issue and expect it to remain at comfortable levels.

TTMT's consolidated net debt: equity and net automotive debt: equity as on December 31, 2012 stood at 0.89 and 0.37 respectively. We maintain our positive view on the company. Currently we have an Accumulate rating on the stock with an SOTP based target price of Rs. 324.

Source : Equity Bulls

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