Tata group's Infopark Properties raises Rs 1,900 cr via zero coupon bonds

Infopark Properties will own 100% of shareholding in TRIL Infopark Ltd which operates the asset Intellion Park, Chennai, spread over an area of 4.6 mn sq ft

Infopark Properties Ltd (IPL), a unit of Tata Realty and Infrastructure Ltd, has raised Rs 1,900 crore through two-year zero coupon bonds. The company enjoys financial flexibility by virtue of being part of the TATA group.

IPL will own 100 per cent of shareholding in TRIL Infopark Ltd (TIL) which operates the asset Intellion Park, Chennai (IPC), spread over an area of 4.6 million square feet (msf). CARE Ratings has assigned "A+" rating to non-convertible debentures (NCDs) with a 'stable' outlook.

Bond dealers said the debt of around Rs 1,900 crore is to be serviced through cash flows generated by IPC. There will be bullet repayment on NCDs. A zero-coupon bond is a debt security that does not pay interest, but instead trades at a deep discount. This provides room for a profit at maturity, when the bond is redeemed for its full face value.

The aggregate debt level of TIL and IPL is expected to increase to close to Rs 3,950 crore as at the end of FY23. The rating takes comfort from the steady revenue profile of IPC supported by a healthy occupancy level of over 90 per cent in the past four years, strategic location, and prime quality.

During FY18-FY20, IPC had maintained full occupancy which declined slightly to around 96 per cent in FY22. Such a healthy occupancy level had translated into a steady revenue profile of over Rs 500 crore being garnered in the past four fiscals.

However, going forward, such occupancy levels of the company are expected to moderate to close to 80 per cent. It's three tenants occupying around 17 per cent of the leasable area are planning to vacate the occupied space by August 2022.

While such vacancy is expected to moderate the revenue profile, IPC will continue to garner revenue of over Rs 500 crore in FY23.

The tenant profile of IPC is strong with the presence of multinational companies such as Amazon, Astrazeneca, Citi Bank, Mindtree, Societe Generale, Genpact, Tata Consultancy Services.