In Pune IT City Metro Rail, a special purpose vehicle that obtained the contract to build, operate, and maintain the project connecting Shivaji Nagar & Hinjewadi in the city, Tata Sons, the holding company of the Tata group, is investing Rs 975 crore.
Details about Tata Sons would invest Rs 975 crore in the Pune IT City Metro rail project
74% of the SPV is owned by the Tata family; Siemens Project Ventures owns the remaining portion. According to a financial source, the 23-km, Rs 7,420-crore project is being financed with a debt-to-equity ratio of 1.8 times, the full debt has been secured, and Tata Sons is supporting the planned equity participation. The Maharashtra and Union governments each have a 50% share in the development of the Pune metro rail.
The aforementioned investment in the metro rail SPV is being made by Tata Realty and Infrastructure (TRIL), an affiliate of Tata Sons. To obtain money and pay off its own debt, TRIL intends to sell its newly completed highways and ropeway projects.
According to bankers, Tata Sons is concentrating on enhancing the profitability of its digital, electronics, and aviation companies. Some entities, such as the Pune metro SPV, may need investment from Tata Sons as growth capital because TRIL is concentrating on paying off its debt. In addition to spending its own capital, which is anticipated to come in the form of dividend income in the current fiscal year, Tata Sons are likely to seek out extra debt financing for these projects.
Tata Sons, which as of March this year had a standalone debt of Rs 30,000 crore, intends to raise money by selling non-convertible debentures. In order to raise about Rs 3,200 crore, Tata Sons are also considering offering Tata Play, its satellite TV broadcasting division. The banker stated that Tata Sons also holds investments in profitable insurance companies and may consider selling some of its holdings in order to raise money.
The Indian government has expanded its focus on infrastructure development, particularly with the Parvatmala plan for ropeways, and TRIL anticipates a boom in the infrastructure industry as a result.