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Sources say that India's Tata Steel is likely to return to the bond market following a near one-year absence.

Two sources with knowledge of the matter confirmed on Thursday that India's Tata steel is set to return to the corporate bond markets after an absence of almost a year.

One source said that the company was already in discussions with investors and merchant bankers. They were offering different tenors and would finalise a few of them based on the levels they receive.

Tata Steel will raise approximately 30 billion rupees (about $345,6 million) from this bond issue. The issue is expected to be completed before the end this month.

According to the source, the company is flexible with regard to maturity and is currently in discussions for bonds of three, five, seven or even ten years.

The sources have both requested anonymity because they are not authorized to speak with media.

Tata Steel didn't immediately respond to an email seeking comment.

India Ratings recently upgraded the bonds issued by the steel company from AA+ to AAA, the highest rating.

India Ratings stated in a February 11 note that "the ratings factor in strategic linkages between TSL, its sponsor Tata Sons Private Limited, and the strong financial flexible of Tata Sons."

Ratings agency also noted that the upgrade reflects the likely reduction of losses in Tata Steel U.K.'s operations over the next 2 financial years, and the eventual profitability.

The company has bonds outstanding worth more than 128,70 billion rupees. Of this, 6,70 billion rupees is due for maturity next month.

Tata Steel's last bond sale was in March 2024 when it raised 27 billion rupies through bonds with a maturity of three years and a coupon rate of 7.79%.

(source: Reuters)