Tata Communications Limited has successfully raised ₹1,000 crore through the issuance of Non-Convertible Debentures (NCDs) on a private placement basis. The company's Financial Resource Raising Committee approved the allotment on August 7, marking a significant move in its financial strategy.

Key Details of the NCD Issuance

Characteristics of the NCDs

The NCDs are characterized as rated, unsecured, listed, and redeemable. They were issued to identified investors through a multiple yield allotment method, as per the company's filing. This method allows for potentially varied returns for different investors based on their bids.

Regulatory Compliance

Tata Communications has ensured compliance with regulatory requirements by providing detailed information as mandated under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has also adhered to the SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, as amended.

Financial Implications

The successful raising of ₹1,000 crore through this NCD issuance demonstrates Tata Communications' strong standing in the debt market. The fixed coupon rate of 6.77% for a 3-year tenure reflects the company's credit quality and the current interest rate environment.

Investor Confidence

The private placement of these NCDs to identified investors suggests a high level of confidence in Tata Communications' financial stability and future prospects. The unsecured nature of the debentures further underscores this trust, as investors are willing to lend without specific collateral.

Conclusion

This NCD issuance by Tata Communications represents a strategic financial move, potentially aimed at optimizing its capital structure or funding specific corporate initiatives. As the NCDs are set to be listed on the NSE's Wholesale Debt Market Segment, it may provide liquidity options for the investors in the future.

Tata Communications , a leading global digital ecosystem enabler, has received a substantial demand notice from the Department of Telecom (DoT) for adjusted gross revenue (AGR) dues. The notice, amounting to approximately ₹7,800.00 crore, covers financial years from 2005-06 to 2023-24.

Breakdown of the Demand

The DoT's demand includes:

• A total of approximately ₹7,800.00 crore for AGR dues
• ₹276.68 crore specifically for disallowed deductions under ISP and NLD licenses

Ongoing Legal Challenges

Tata Communications is not taking this demand lightly. The company has existing appeals pending at two key judicial bodies:

1. The Supreme Court of India
2. The Telecom Disputes Settlement and Appellate Tribunal (TDSAT)

These appeals relate to the company's ILD (International Long Distance), NLD (National Long Distance), and ISP (Internet Service Provider) licenses.

Company's Stance

The Managing Director of Tata Communications has expressed confidence in the company's position. Key points from the company's perspective include:

• Their appeals are not covered by the Supreme Court's October 2019 AGR judgment on UASL (Unified Access Service License) licenses.
• The company believes it can defend its position based on legal assessments.

Broader Context

The AGR issue has been a significant concern for the Indian telecom sector:

• The government's initial calculations showed a total AGR liability of around ₹1.65 lakh crore for all telecom operators.
• Interestingly, Tata Communications was not included in the March 2022 liability calculations for other major operators.

This demand notice to Tata Communications represents another chapter in the ongoing AGR saga that has gripped India's telecom industry. As the company prepares to challenge this demand, the outcome could have significant implications not only for Tata Communications but potentially for the broader telecom sector in India.

Investors and industry observers will be closely watching how this situation unfolds, particularly given the substantial amount involved and the complex legal landscape surrounding AGR dues in India.