Tata Motors has revived plans to come out with a non-convertible debenture (NCD) issue following the drop in corporate bond yields.

The homegrown auto major on Friday informed the stock exchanges that it is planning to raise Rs 1,000 crore through the the issue of securities and its board will meet on May 20 to consider the proposal.

“The company is desirous of offering rated, listed, secured, redeemable, non-convertible debentures (NCDs) aggregating Rs 1,000 crore, and in this regard is holding a meeting of its duly constituted committee of the board on May 20. The above issuance is pursuant to the approval of the board of directors’ resolution passed at its meeting held on March 27, 2020,” Tata Motors said.

More than a week back, Tata Motors had decided to withdraw an NCD issue to raise up to Rs 1,000 crore because of tight market conditions. The company, which had planned to raise the debentures on a private placement basis, had then cited tight money market conditions as the principal reason for the move.

Tata Motors had then pointed out that while it continues to have sufficient liquidity and would consider the issue of NCDs at an appropriate time and under normalised market conditions.

The company had planned to issue the NCDs in three tranches of Rs 500 crore, Rs 300 crore and Rs 200 crore with redemptions due on September 30, 2022, November 28, 2022 and December 29, 2022, respectively.

While officials from the company could not be reached for comments, market circles said that its latest move could be on account of corporate bond yields softening (by more than 15 basis points) over the past couple of days because of the announcements made by finance minister Nirmala Sitharaman amid fears that the Centre would again increase the gross market borrowing for this fiscal.

Steps announced by the finance minister are expected to improve demand for bonds with ratings of AA and lower.

Shares of Tata Motors on Friday ended marginally higher at Rs 84.40 on the BSE.