Mumbai: With just five days left to deposit Rs1,756 crore for 31% stake in Satyam Computer Services Ltd, Tech Mahindra Ltd is raising money from banks, mutual funds and insurers by selling non-convertible debentures (NCDs) and commercial papers (CPs).
Tech Mahindra plans to raise Rs875 crore through NCDs and CPs, people familiar with the developments said on condition of anonymity.
The firm plans to issue two NCDs of Rs300 crore each that would mature in four and five years, respectively, at a coupon rate of 10.25%. The company also plans to raise Rs275 crore through CPs, they said. Coupon rate of a bond is the amount of interest paid per year expressed as a percentage of the face value of the bond.
Sale process: The headquarters of Satyam Computers in Hyderabad. Mahesh Kumar A / AP
The people said state-owned Corporation Bank plans to subscribe to Rs100 crore of NCDs, while private sector lender Yes Bank Ltd will pick up about Rs150 crore of the debentures.
Private insurers Kotak Mahindra Old Mutual Life Insurance Ltd and Birla Sun Life Insurance Co. Ltd have subscribed to Rs25 crore each, they said. State-owned Life Insurance Corp. of India is also one of the subscribers, but the figure is not known yet. From the mutual funds, ICICI Prudential Asset Management Co. is said to have subscribed to Rs150 crore. The firm declined comment on the matter. UTI Mutual Fund is considering subscribing to Rs100 crore but is yet to decide whether to buy NCDs or CPs, the people said. Reliance Mutual Fund is believed to have subscribed to one-year CP of Rs275 crore, they said.