Tata Communications board will consider the proposal to raise funds through NCDs on July 18
The board of Tata Communications will consider the proposal to raise funds through non-convertible debentures (NCDs) on July 18, 2024. Tata Communications manages its balance sheet stability through a debt management framework that aims to balance the need for financing with the long-term goal of maintaining financial stability cost-effective financing and reducing the risks associated with debt.
Tata Communications looks to custom-make its debt framework. The company told the exchanges that the proposal of raising funds through non-convertible debentures would be considered by its board on July 18, 2024.
This move is in line with the established debt management framework for Tata Communications. This framework guides its refinancing activities, allowing them to adjust the portfolio strategically in pursuit of certain goals.
The framework will be oriented towards a balanced debt maturity schedule and a diversified mix of instruments of debt. It will ensure long-term financial stability and access to a diversified pool of lenders across different sectors.
Tata Communications is pursuing competitive rate debt financing. Its framework seeks to hedge out debt-related risks, including interest rate risk, currency risk, and refinancing risk. It is also hoping that by structuring debt in this strategic manner, they can create a "natural hedge" of matching business cash flows. NCDs are debt instruments of the company, issued to raise capital. Unlike convertible debentures, NCD cannot be converted into equity shares of the company.
The board meeting scheduled will decide whether Tata Communications will also proceed with the NCD issuance as part of its debt management strategy.
