InvestorQ : How are large Indian companies like RIL, M&M, Tata Steel and L&T managing their operations in the midst of the lockdown?
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How are large Indian companies like RIL, M&M, Tata Steel and L&T managing their operations in the midst of the lockdown?

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Mary Joseph answered.
1 year ago
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Large companies are actually looking to borrow from the market as funds are easily available and they have the muscle to get funding from banks. Large companies in India are looking to absorb cash from debt markets via multiple debt issuances to banks, which now have access to cheap money from the Reserve Bank of India (RBI). In fact, companies like Reliance Industries, Larsen and Toubro, Mahindra and Mahindra, Tata Steel, TVS Motors and NHPC are looking to raise close to Rs.37,000 crore. The whole idea is to keep the companies cash-ready and well funded for the prolonged slowdown. That is because even after the lockdown is lifted, the actual economic impact may persist for a long time. Companies see a huge opportunity as currently banks can borrow at 4.4% from the RBI to buy bonds issued by Indian companies, under the Targeted Long Term Repo Operation (TLTRO). Most banks prefer to lend to large established corporates than to take on too much of financial risk in small and medium companies. Here are some samplers. RIL plans to raise Rs.25,000 crore via NCDs, Tata Steel will raise Rs.7000 crore while Tata Motors will raise around Rs.1000 crore and L&T around Rs.2500 crore. Companies need money for working capital requirements and for the overheads as a liquidity buffer.

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