Tata Capital Financial Services – NCD Issue Details


Tata Capital Financial Services – NCD Issue

About the Company:

  • Tata Capital Financial Services Limited (TCFSL) is a Systemically Important Non-Deposit Accepting Non-Banking Financial Company (“ND-SI-NBFC”) focused on providing a broad suite of financing products customized to cater the needs of various segments.
  • TCFSL was incorporated in 2010 and was registered with the RBI to commence the business of an NBFC without accepting the public deposit with effect from November 04, 2011.
  • TCFSL is promoted by and is wholly owned subsidiary of Tata Capital Limited (TCL). TCL is a diversified financial services company providing services through its subsidiaries to retail, corporate and institutional clients. TCL is the financial services arm of the Tata group, which is a diversified global business group serving a wide range of customers across varied sectors such as steel, motors, power, chemicals, telecommunications and hospitality.

TCFSL’s financing products have been categorized into

  • Commercial and SME Finance Division: The Commercial and SME Finance Division offers commercial financing to corporates which includes vanilla term loans, working capital term loans, channel finance, bill discounting, construction equipment finance, leasing solutions, lease rental discounting, promoter finance and structured products.
  • Consumer finance and Advisory Business: The Consumer finance and Advisory Business division offers a wide range of consumer loans such as auto loans (used car and two wheeler loans), business loans, loans against property, personal loans, consumer durable loans and loans against securities as well as wealth management.

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This document is prepared by the Research Division of IndiaNivesh Securities Ltd (The Company) on the publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been taken based upon this information. IndiaNivesh Securities Ltd does not warranty either expressly of impliedly, the accuracy, completeness or reliability of any information provided herein. Neither IndiaNivesh Securities Ltd nor any of its employees / Directors / authorized representatives shall be liable for any direct, indirect, special consequential, punitive or exemplary damages including lost profits arising in any way from the information contained in this material, and hereby disclaims any liability with regard to the same. This report is disseminated for the information of authorized recipients only and is not to be relied upon or taken is substitution for the exercise of due diligence and judgment by any recipient. This report does not provide individually tailored investment advice; investor should seek independent financial advice with respect to the merits and risks involved in any of the matters concerning investment in the Schemes / products mentioned in the report.

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Share Market Today - 9th August 2019

NIFTY Daily ChartIt was a stellar comeback by the bulls during yesterday’s session. Initially, the benchmark indices started the session with an upside gap but remained flat. However, strong short covering during the second half helped the markets to close with spectacular gains. The index NIFTY sneaked above the 11000 mark during the process and closed with gigantic gains of 177 points. On the other hand, NIFTY BANK index too ended with hefty gains of 400 points.During the first half, market breadth turned in the favor of declining counters but in the final hour of the session it changed to positive. On the sectoral front, none of the pockets ended in loss which indicates broad based buying. Form the pack of gainers, NIFTY AUTO (+3.03%) and NIFTY REALTY (+1.86%) stocks were the top performers. From the F&O pack, AUROPHARMA (+7.93%), HCLTECH (+7.10%) and TATAMTRDVR (+6.64%) were the top gainers.In line with our buy recommendation, we observed a sharp rally during the previous session. The index Nifty initially oscillated in a range of 10900 – 10850 but then a breakout during the final hour helped the index to close above 11000 mark. Now this move has confirmed a higher top and higher bottom formation confirmation on the hourly chart which means that the very short term trend has changed. Hence, index has now potential to test 11150 which is the placement of 200 DSMA and then 11200 too.On the downside, the support has shifted to 10970 followed by 10840. TATASTEEL : BULLISH Since past couple of years, TATASTEEL was trading within a downward sloping channel. At this juncture, TATASTEEL has approached the lower end of falling channel. Also it is now trading at the PRZ (Potential Reversal Zone) of bullish DEEP CRAB harmonic pattern. The stock could be accumulated between 365 – 345 levels with a stop of 330 for a bounce towards 420. Disclaimer)

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Larsen & Toubro Stock Prices – Shareholding Pattern, Charts & Stock details

INVESTMENT RATIONALE Government Gung-ho on Infra-Projects: Larsen & Toubro (L&T), reported strong Q1FY20 earnings on back of spending driven by Government push on construction & infra projects. Strong Earnings: In Q1FY20 for continuing operations L&T registered a Consolidated Gross Revenue growth of 10% and Consolidated PAT growth of 20.50% (Y-o-Y). Importantly, operating margins improved by over 200 (bps); primarily driven by cost efficiencies, better capacity utilisation and capability enhancement. Sizeable Strong Order Book: Consolidated Order Book of the group stood at Rs.294,014 crores as at June 30, 2019, international Order Book component being 21%. This gives revenue visibility of 2 years at constant top line. New Order Wins: The Company successfully won new orders worth Rs. 38,700 crores at the group level during the quarter ended June 30, 2019 a growth of 11% (YoY). Order inflows mainly came from Infrastructure and Power segments. Infrastructure Mainstay of Order Book: Around 75% of the order is from Infrastructure segment, which stands at Rs.2,18,825 crores as at June 30, 2019. General Elections through and a firm mandate for pro-incumbency we expect Government to push harder infra-projects be it infrastructure development, rural electrification, airports, railroads, water supply and irrigation. All segments to fire now: Key revenue contributors are infra-projects (~50%), IT&ITES (10%), Hydrocarbons (11%) & Financials (9%) while at PBT contribution from Infra-projects (34%), IT&ITES (20%) ,Hydrocarbon (7%) and Financials (19%). Profitability and blended margins are primarily driven by Financials and IT services and both these segments are on high growth trajectory. Monsoon Fury: It’s unfortunate but parts of Maharashtra, Kerala, Andhra Pradesh, Karnataka and Gujarat have been devastated by floods. Restoring normalcy will require significant rebuilding of infra-structure, roads, water pipelines, electrical line and Civic amenities. Financials: The Company has delivered Consolidate Revenue Cagr of 11% and PAT Cagr of 16% in preceding 5 years. It enjoys ROE of around 17.50% and its long term debt to equity ratio is 1.22. We expect profitability to pick up momentum going forward. Valuation: Decent Monsoons so far, greater infra push by Government, monetary policy easing and improving economy augurs well for L&T. We expect the present of momentum of Q1FY20 will continue over FY20 & FY21.Assuming, L&T to deliver Consolidated PAT Cagr of 20% over next couple of years, translates into an EPS of Rs.105. It is presently trading at PER of 20.53x and P/BV of 2.96 on ttm basis respectively which is at a discount from mean levels. Valuing the company at a PER of 20x FY21e, per share target price comes at Rs.2100.)

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