Tata group’s total debt is set to exceed Rs 1,00,000 crore in the current fiscal, but it appears comfortable on the liquidity front, a report has said.
“We expect the total debt of the Tata group as of the end of FY’09 (ending this month) at over Rs one trillion, of which Rs 117 billion is due through March 2010,” analysts at domestic brokerage unit of financial major Kotak group said.
When contacted, Tata Sons spokesperson told PTI, “We are not in a position to comment on such reports. As you are aware Tata Sons does not aggregate the debt of individual group companies as each company is a standalone legal entity and is evaluated accordingly.”
Increase of more than Rs 30,000 crore in group’s overall outstanding debt position from year-ago level of about Rs 70,000 crore is primarily due to its aggressive capital expenditure plans and past acquisitions, the report stated.
Analysts, however, noted that Tatas’ funding challenges are manageable and debt obligations could be met through free cash flow generated at various group companies and proceeds from the stake sale by holding company Tata Sons.
“We believe the group’s liquidity position is comfortable at an aggregate level,” Kotak Institutional Equities Research analysts said, adding that possible fund-raising options include monetising Tata Motors’ commercial vehicle division and stake sale by Tata Sons in TCS and Tata Tele Services.