Tata Projects plans to raise up to Rs 750 crore through non-convertible debentures (NCDs), a long-term instrument, and Rs 200 crore through commercial paper, a short-term paper, to finance the execution of various projects.
The company’s net debt swelled to Rs 3,970 crore at the end of September 2023 to fund the increased working capital.
Its working capital requirement has improved slightly, with receivable days (including unbilled revenue and retention money) reducing to 306 days in FY23. (FY22: 313 days; FY21: 345 days).
TPL, an engineering, procurement, and construction (EPC) firm, has an adequate liquidity cushion in the form of unutilised fund-based limits.
TPL’s strong financial flexibility would enable the company to refinance its long-term debt, rating agency India Ratings said in a statement. The agency has assigned an “AA” rating to proposed debentures and an “A1+” rating to commercial paper.
The Tata Group entity had cash and cash equivalents of Rs 680 crore at the end of September 2023 and unutilised fund-based limits of around Rs 500 crore at the end of October 2023.
TPL raised two subordinated NCDs of Rs 500 crore each in FY22 and FY23, which have a redemption tenure of six and a half years and six years, respectively.
TPL redeemed NCDs amounting to Rs 250 crore on August 30, 2023.
Its total annual principal repayment obligations for October 2023-March 2024 period amount to around Rs 390 crore.
This is likely to be met through the available free cash and a likely improvement in cash accruals during the year.
During April-September 2023, the company reported revenue of Rs 8,110 crore in six months ended September 2023.
Its revenue is expected to increase by 8-10 per cent year-on-year (Y-o-Y) basis in FY24, backed by the company’s strong execution capabilities.
It has a healthy order book of Rs 46,000 crore at the end of September 2023 (2.7x of FY23 revenue).