Tata Sons, the holding company of the Tata group, is investing Rs 9.75 billion in Pune IT City Metro Rail, a special vehicle that won the contract for the construction, operation and maintenance of the urban project connecting Shivaji Nagar and Hinjewadi.

The Tatas own 74% of the SPV, while Siemens Project Ventures owns the rest. According to a banking source, the Rs 74.2 billion, 23-km project is being financed with a debt-to-equity ratio of 1.8 times, and the entire debt is tied up, with Tata Sons backing the proposed equity commitment. The governments of Maharashtra and the Union each have a 50% stake in the Pune metro rail project.

Tata Realty and Infrastructure (TRIL), a subsidiary of Tata Sons, is investing in the SPV metrorail.

TRIL plans to sell recently completed road and cable car projects to raise funds and pay off its own debts.

According to bankers, Tata Sons is focused on increasing the contribution of its digital, electronics and aerospace businesses to the group's profitability, and some entities, such as the Pune metro SPV, can Tata Sons financing as growth capital because TRIL focuses on debt repayment. In addition to investing its own money, which is expected to flow in as dividend income in the current fiscal year, Tata Sons is likely to raise additional debt for these projects.

Tata Sons, who had a stand-alone debt of Rs 300 billion in March this year, plans to raise funds through the issuance of non-convertible bonds. Tata Sons is also considering listing its satellite TV broadcasting arm, Tata Play, to raise around Rs 32 billion. Tata Sons also has interests in profitable insurance companies and may consider selling some of their holdings to raise money, the banker said.

TRIL expects a boom in the infrastructure sector, mainly due to the Indian government's increased emphasis on infrastructure development, particularly through the Parvatmala ropeway initiative.