On October 1, 2024, TARC Limited (The Anant Raj Corporation) announced the refinancing of its existing debt along with a ₹250 crore additional working capital facility available on call. This strategic decision is backed by a successful fundraising effort involving a consortium of esteemed Indian banks and financial institutions, reflecting their confidence in TARC’s financial strategies.
Key Features of the Refinancing Plan
- Lead Consortium: The refinancing was led by Kotak Mahindra Bank, which assembled a consortium that includes prominent institutions such as Nomura Capital, Aditya Birla Capital, and STCI. This collaboration was essential in securing ₹1,000 crore at highly favourable terms, demonstrating the trust these institutions place in TARC’s strategic vision and financial management, as well as the intrinsic value of its projects, ongoing sales, and timely execution of construction activities.
- Favourable Borrowing Cost: With the new borrowing cost set at 12.75% per annum, TARC expects a significant boost in cash flows and substantial savings. This reduction in interest expense will provide the company with enhanced financial flexibility for future growth and expansion initiatives.
- Security of Debt: The refinancing is secured against the project cash flows of two of TARC’s flagship developments, TARC Kailasa and TARC Tripundra. By anchoring the refinancing to anticipated revenues from these projects, TARC effectively aligns its financial strategy with operational performance.
- Future Planning: Moreover, TARC’s remaining debt will be secured by project cash flows from TARC Ishva. This proactive approach positions the company for sustainable success in its new and upcoming projects, ensuring long-term viability and growth.
Commenting on this development, the Managing Director and CEO of TARC Ltd, Mr Amor Sarin, stated that the company is excited about this transaction, as it represents a significant positive advancement for the company.
On October 01, 2024, the share price of TARC Ltd opened at ₹250.00, touching the day’s high at ₹255.75, as of 10:41 AM on the NSE.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
