Tata Capital Eyes Rs 2,000 Cr Loan for Navayuga Engineering

Tata Capital is currently engaged in significant negotiations to extend a substantial loan of approximately Rs 2,000 crore to Navayuga Engineering Company Ltd (NECL). This private credit arrangement is designed to bolster the company's working capital and manage its existing financial obligations.

The proposed financing, carrying an interest rate of about 13%, is intended to support NECL's immediate working capital needs, facilitate the refinancing of its outstanding debt, and improve its overall liquidity. This transaction represents a considerable private credit deal within the infrastructure Engineering, Procurement, and Construction (EPC) sector in recent months.

NECL, part of the Navayuga group established in 1986, has previously worked to reduce its debt. The company has monetized completed road projects, leading to improved leverage and a sharper fall in total debt to earnings in fiscal year 2024. These strategic moves have resulted in stronger cash flows and a reduced reliance on debt during the past year.

Tata Capital's active participation in mid-market credit transactions, including deals with higher interest rates compared to traditional banks, underscores its strategy in the credit products market. The company has previously co-financed significant deals, demonstrating its engagement in the broader financial landscape.