By Sakshi Jain, Sr. Sub Editor- ELE Times
In a significant development, Tata Group has made a substantial capital infusion into its Greenfield electronic component and contract manufacturing business, Tata Electronics. The conglomerate has reportedly secured funds of over Rs 7,600 crore through a combination of capital infusion by the parent company, Tata Sons, and secured loans.
According to documents filed with the Registrar of Companies (RoC) and reported by the Economic Times, Tata Electronics received a capital infusion of over Rs 608 crore in the financial year 2022-23 from Tata Sons. This infusion marked the highest amount received in a single financial year, bringing the total capital infusion over the past three years to Rs 1,820 crore.
The authorized capital of Tata Electronics stands at Rs 2,000 crore, indicating that the company has reached a significant portion of its funding limit. Furthermore, regulatory filings reveal that the company has also raised secured loans totaling Rs 5,799 crore. It is speculated that a portion of these loans may have already been paid off.
Commenting on the situation, Mohit Yadav, the founder of AltInfo, stated, “The company has almost exhausted its funding limit from the parent since the authorized share capital is Rs 2,000 crore and paid-up capital is Rs 1,820 crore, leaving a balance funding capacity of Rs 180 crore to be utilized. It will have to expand its authorized share capital limit to further expand funding.”
This move by Tata Group demonstrates its commitment to strengthening its presence in the electronic component and contract manufacturing sector. The significant capital infusion signifies the group’s confidence in the potential of Tata Electronics and its strategic importance within the conglomerate.
By securing substantial funds, Tata Electronics aims to support its future growth initiatives, expand its operations, and enhance its manufacturing capabilities. The company’s focus on greenfield projects aligns with the increasing demand for electronic components and contract manufacturing services, both in India and globally.
As Tata Electronics moves forward, it is likely to explore avenues for further fundraising to accommodate its expansion plans. Increasing the authorized share capital limit will provide the necessary financial flexibility for the company to capitalize on emerging opportunities in the electronic manufacturing sector.
Overall, Tata Group’s investment in Tata Electronics demonstrates its continued commitment to driving innovation, fostering technological advancements, and positioning itself as a key player in the electronic component and contract manufacturing industry.