The board of directors of TVS Motor Company Ltd, in a meeting held earlier today, approved the issuance of non-convertible debentures or NCDs aggregating up to ₹500 crore on a private placement basis, the company said in a regulatory filing.
Analysts suggest that the vehicle manufacturers have been lately raising money via issuing debentures to ensure ample liquidity is maintained during the ongoing pandemic.
Tata Motors Ltd and Mahindra & Mahindra Ltd have approved raising ₹1,000 crore each by issuing NCDs. Among the auto ancillary companies, Motherson Sumi Systems Ltd (MSSL) recently informed the exchange about its plan of raising ₹500 crore through the same debt instrument.
Earlier this month, TVS Motor acquired British classic bike company Norton Motorcycles in an all cash deal for about ₹151 crore. The company is expected to infuse additional funds in Norton to mobilize operations and expand the workforce in the short to medium term.
Even as the two-wheeler industry closed FY20 with a year-on-year decline of 18%, TVS Motor’s domestic two-wheeler wholesales dropped 23% yoy last fiscal. The company’s three-wheeler volumes were down 29% YoY for FY20.
Although there was no production during April due to the nationwide lockdown, the company on Tuesday said it has created a compulsory online module with an objective to educate employees about necessary precautionary measures.
“Only those employees who have cleared the assessment will be allowed to resume work,” R Ananda Krishnan, executive vice president – human resources and information technology at TVS Motor said.
The company has also prepared manuals with guidelines for area offices and dealerships and has advised its associates to abide by government mandates.
