Tata Global Beverage is up 1.8% at Rs. 160.60 per share, before cooling off from the day’s high of 161. Broader markets are trading absolutely flat, with BSE Sensex up 50 points at 20,600. The world's second-largest tea group plans to raise Rs 325 crore via issue of 3-year low coupon bonds, rated AA+ by ICRA. These three-year bonds will carry 3% coupon and redemption premium of 9.75%, leading to effective annual return of 6.06% to investors.

Thus, company will be able to defer a large part of interest payout to a later date through the low coupon bond. Since these bonds will not have a sinking fund to collect accrued interest, Indian banks will not be allowed to buy them as per a recent RBI directive. Thus, the investor pool will be quite lower. Before RBI's move, Tata Steel and Indian Hotels of Tata group had issued low-coupon bonds. However, small issue size and Tata tag should help the issue sail through, being the first after RBI ban.

With a market cap of a tad below Rs. 10,000 crore, Tata Global had consolidated networth of Rs. 4,810 crore and net debt of barely Rs. 317 crore, as of 31^st March 2013, giving it ample scope to leverage its balance sheet further.