Mumbai, March 1: Tata Sons — the apex holding company of the $62.5-billion Tata group — is planning to raise over $500 million through an overseas bond issue.

The company has appointed Citibank and Morgan Stanley as bankers to advise the group on the transaction, said sources close to the development.

Tata Sons is also approaching sovereign wealth funds and hedge funds overseas to determine their interest in the issue, sources said.

The holding company of the Tata group is keen to raise money to meet the growing funding needs of the group. Several obligations have arisen out of a slew of global acquisitions, including Jaguar Land Rover (JLR) and the Anglo-Dutch steel maker Corus, which the Tatas have acquired for over $12 billion.

Sources said Tata Motors was likely to use a large part of the money raised. The automobile company, which is due to launch its long-awaited Rs 1-lakh Nano on March 23, has “several uses” for the funds, including paying for the JLR acquisition, said an investment banker.

Tata Motors has a payment coming up in connection with the $2.3-billion buyout of JLR, which it concluded last year.

This is not the first time that Tata Sons has planned to raise money through an overseas bond issue. The bond market was abuzz with speculation last year that the Tatas would be planning a major fund-raising exercise.

However, the group did not go through with the plan, especially after the markets crashed.

With the funding needs for the group becoming urgent, it is very likely that Tata Sons will announce this offering shortly.

Like other Indian companies, Tata Sons has been pledging shares of its investments in key group companies such as Tata Motors, Tata Consultancy Services, Tata Teleservices, Tata Chemicals, Tata Power and Indian Hotels to raise funds for a variety of purposes, including financing the working capital needs of group companies.

Recently, Tata Capital — the financial arm of the group — raised over Rs 3,000 crore through a non-convertible bonds issue having a greenshoe option. The issue was oversubscribed six times.

Tata Motors has also floated a fixed deposit scheme that opened in early December and offers 10.5 per cent for a two-year tenure and 11 per cent for a three-year deposit.

The company expects to garner between Rs1,500 crore and Rs 2,000 crore from this scheme, which it will also market to its over 3,00,000 employees. It is evident that the group is looking at all possible avenues to meet the fund requirements of its expanding operations.