Tata Group seen comfortable with over Rs1,00,000 crore debt

16 March 2009

The Tata Group has total debt exceeding Rs1,00,000 crore in the current fiscal, but seems comfortable on the liquidity front, according to a brokerage report.

The group's overall outstanding debt rose from over Rs30,000 crore a year ago by another Rs70,000 crore, due primarily to aggressive capital expenditure plans and past acquisitions, the report said.

''We expect the total debt of the Tata Group as of end-FY'09 (ending March 2009) at over Rs1 trillion, of which Rs117 billion is due through March 2010,'' analysts at brokerage unit of the Kotak Group said.

The Tata Group, however, said these are aggregates for stand-alone companies and these companies are evaluated as separate entities by the group.

Analysts also said Tatas' funding plans are manageable and debt obligations could be met through 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.