Tata Power Co. is in discussions with a group of banks to raise at least $450 million through an overseas loan to support its general business operations, according to people familiar with the matter. The proposed borrowing would be structured as an External Commercial Borrowing (ECB), a financing route that enables eligible Indian companies to access funds from foreign lenders. Sources said the discussions are currently at an early stage, and the final size, pricing and other terms of the loan have not yet been finalised.

According to the sources, Tata Power is seeking a five-year loan that would be backed by its shareholdings in subsidiaries based in Indonesia and Singapore. The proposed collateral arrangement is intended to strengthen the financing structure for overseas lenders. A spokesperson for Tata Power declined to comment on the reported discussions, and the company has not made any official announcement regarding the proposed fundraising.

The move comes amid a broader revival in external commercial borrowings by Indian infrastructure and energy companies, supported by easing global funding costs and renewed appetite among international lenders. Companies are increasingly looking to overseas debt markets as an alternative source of capital to finance expansion plans while benefiting from potentially lower borrowing costs and longer repayment tenures compared with some domestic financing options.

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According to data compiled by Bloomberg, Tata Power is already among the top five large Indian borrowers accessing foreign-currency loans. The trend has also been reflected in other major energy companies. Last month, Bloomberg reported that Adani Green Energy Ltd. was exploring plans to raise up to $1 billion through an offshore loan, highlighting growing activity in overseas debt markets among large Indian corporates.

External Commercial Borrowings are governed by regulations issued by the Reserve Bank of India and allow eligible companies to raise capital from international lenders for approved purposes. Rating agency CareEdge noted last month that Tata Power is likely to refinance part of its existing debt obligations, as the company faces substantial loan repayments over the next three years while simultaneously pursuing significant capital expenditure across its business operations.

If completed, the proposed overseas loan would provide Tata Power with additional financial flexibility as it continues to invest in renewable energy, power transmission and electricity distribution projects. The funding would also support the company's strategy of diversifying its sources of capital beyond domestic banks and bond markets, while strengthening liquidity to meet future investment requirements. The discussions, however, remain preliminary, and there is no certainty that the transaction will be finalised on the currently proposed terms.

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