Private placement of a perpetual bond by Tata Motors Finance Limited.

Economics 09 November 2020 12:01:PM

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Tata Motors Finance Limited’s private placement of a perpetual bond is up for a deal. In types of instruments, it is a perpetual and subordinated bond. Which has a listing on the wholesale debt market (“WDM”) Segment of the National Stock Exchange of India Limited (“NSE”). If we talk about the nature of the instrument so it is unsecured yet beneficial. How?  So, this is a regular source of income that is earned on an annual basis, and if the issuer is financially balanced, investors should expect it to continue for a long time. And this is a benefit of investing in perpetual bonds. The size of the issue is Rs. 25, 00, 00,000 (Rs. Twenty-Five Crores). The Mode of trade and issuene is through the Demat only (Private only). 

 

Tata Motors Finance Limited, Private placement of 250 Face Value of Rs. 10,00,000 Perpetual, Subordinated, Unsecured, Listed Non-Convertible Debentures For Cash Aggregating to Rs. 25 Crores with a minimum subscription of Rs. 1,00,00,000 and above with a greenshoe option of up to Rs. 50 Crores with a greenshoe option of up to 500 debentures.

Important things to keep in mind:-

  • Bidders are advised to bid/quote solely in compliance with the operating guidelines provided by stock exchanges.

  • Rejection is responsible for bids with an indicative/ preliminary number.

  • The decision of the Company concerning the acceptance of the number and volume of tenders shall be final.

  • At its sole and utter discretion, the issuer is entitled to approve or reject any application, in whole or in part, without providing any reason whatsoever.

  • Application forms that are incomplete or do not comply with the terms and conditions stated in the application form may be refused.

What are perpetual bonds:-

 

Fixed-income security with no maturity date is a perpetual bond, also known as a "console bond" or "prep." This type of bond is sometimes considered, rather than debt, to be a type of equity. One big downside to these types of bonds is that they are not redeemable. The big advantage of them, though, is that they forever pay a constant stream of interest payments.

 

Within a tiny niche of the bond market, permanent bonds still exist. This is mostly because there are very few companies that are secure enough for investors to invest in a bond where they can never repay the principal.

 

History of Perpetual Bonds:-


In the 18th century, around the year 1720, the name of the British Government is traced for issuing perpetual bonds for raising money at the time of World War I. For governments, some experts recognize such bonds as a savior in turbulent economic times.

 

Summary and snapshot:-

 

"Earn Annual Interest of 9.75%
Tata Motors Finance Perpetual Bond
Face value: 10 lacs
Rating: A-
Call option - 10 years from the date of allotment.
Demat mandatory
Final assurance: 9th November"

 

Contact details:-

Private placement of the bonds can be done by intermediaries with a debt desk The minimum bid is usually of 1cr and the above Demat account is required to be able to buy these perpetual bonds.

If interested in this opportunity so, please contact us for Subscription at 022- 48934000 or drop us a mail at debt@geplcapital.com