Tata Capital in talks to lend Navayuga Engineering Rs 2,000 crore

Tata Capital is in advanced discussions to lend around Rs 2,000 crore to Navayuga Engineering Company Ltd (NECL) at an interest rate of about 13%, people aware of the development said.

The proposed financing is expected to support working capital requirements, refinance existing debt and strengthen liquidity at the Hyderabad-based engineering and infrastructure company. This is one of the larger private credit-style deals in the infrastructure EPC space in recent months.

Spokespersons of Tata Capital and NECL did not immediately respond to requests for comment.


NECL is part of the Navayuga group, promoted by CV Rao and Chinta Sridhar. Established in 1986, the group's interests span from civil construction and infrastructure development to information technology.

The company has reduced debt by selling its completed road projects, including Navayuga Udupi Tollway in fiscal 2024. Lower debt and better profits have improved leverage, with total debt to earnings falling sharply in FY24. It wasn't looking to take up new development projects soon, a ratings report said last year.

With the monetisation of its road portfolio and improved debt position, its cash flows improved in FY24, resulting in lower reliance on the debt during the year, Care Ratings said in its report.

An interest rate of around 13% for a ₹2,000 crore facility is a premium over traditional bank lending rates. It indicates the risks associated with the credit.

Tata Capital has been active across a range of credit products, with some segments priced at relatively high interest rates compared with traditional bank lending. It is increasingly participating in mid-market credit transactions.

The lender has been a co-financier in syndicated deals in May. It participated in the roughly ₹2,100 crore acquisition financing for Tilaknagar Industries, priced at about 9%-a bank-style loan alongside Avendus, ICICI Bank, JP Morgan and others. Tata Capital also joined the refinancing of Jayaswal Neco Industries, where 17.5% debt was replaced with funding at 12.5%, alongside Investec, Nippon India Alternative Investments and Vivriti Asset Management.