Apollo Tyres Ltd. makes a corporate announcement

The ₹10,000 million NCD proposal does not have a disclosed end-use in the board filing. The filing authorises fundraising of up to ₹10,000 million through private-placement NCDs, subject to shareholder approval, but does not state whether the proceeds will refinance high-cost debt or fund new capex. Therefore, neither use can be presented as the stated purpose. ^[1]

Alignment with Q2 FY27 net debt

As of September 30, 2026, Apollo Tyres reported net debt of ₹3,259.9 Cr, calculated from ₹1,623.2 Cr of long-term borrowings and ₹2,265.1 Cr of short-term borrowings, less ₹628.4 Cr of cash and cash equivalents. ^[2] The corresponding net-debt-to-TTM-EBITDA ratio was 1.23x. ^[2]

• The proposed ₹1,000 Cr issuance is equivalent to roughly 30.7% of reported Q2 net debt—a derived comparison using the ₹1,000 Cr proposed issuance and ₹3,259.9 Cr net debt. ^[2]
• If used to refinance existing borrowings, it would primarily replace debt; net debt should not rise mechanically, although interest cost could fall only if the new NCDs carry a lower effective cost.
• If used for new capex, it would represent incremental borrowing and could increase net debt unless funded alongside internal accruals or offset by cash generation.

The investor presentation separately shows September 2026 net debt at approximately ₹3,300 Cr and net-debt-to-EBITDA at 0.9x, but the detailed Q2 financial-results computation reports ₹3,259.9 Cr and 1.23x. ^{[3] [2]} The difference in leverage ratio is not explained in the cited material; the detailed financial-results computation is the more precise reference for Q2 FY27.

Conclusion: the issuance should currently be read as a proposed funding programme, not as a confirmed refinancing or capex transaction. Its eventual effect on leverage depends on the final tranche terms and disclosed use of proceeds.

Apollo Tyres’ company-wide WACD is not directly disclosed and cannot be confirmed from the available debt terms. The latest Q2 FY27 data supports an EBITDA-to-interest coverage proxy of 9.61x, while the latest directly reported KPI-based interest coverage ratio is 10.13x for Q1 FY27. The ₹10,000 million board authorization does not yet have a disclosed 24-month maturity schedule.

Current debt metrics

• WACD: Not confirmed. The company has disclosed a ₹750 Cr NCD program as of June 30, 2026, including a ₹500 Cr tranche carrying 8.75% interest, but the rates and balances for the rest of the borrowing book are not provided. A separate ₹500 Cr NCD allotment on September 30, 2026 carries a 7.81% coupon. These disclosed coupons are insufficient to calculate a company-wide weighted average. ^{[4] [5]}
• Indicative trailing interest burden: TTM interest expense was ₹275.9 Cr and gross borrowings at September 30, 2026 were ₹3,888.3 Cr; dividing the former by period-end borrowings gives an indicative 7.1%, but this is not WACD because it uses a period-end rather than average debt balance and does not reflect the full instrument-level debt mix. ^{[2] [2]}
• Interest coverage: On the latest Q2 FY27 TTM numbers, EBITDA was ₹2,652.7 Cr and interest expense was ₹275.9 Cr, implying 9.61x EBITDA/interest coverage, derived from the reported figures. ^[2] The latest directly reported KPI ratio is 10.13x for Q1 FY27. ^[6]
• Important distinction: Q2 FY27’s reported 4.64x is the debt-service coverage ratio, not the interest coverage ratio. ^[2]

Effect on maturities over the next 24 months

The November 4 approval is for up to ₹1,000 Cr of NCDs, in one or more tranches, subject to shareholder approval; the filing states that the remaining issuance details will be provided after finalization. ^[1] Consequently, management has not provided a confirmed 24-month maturity bridge, refinancing schedule, amortization profile, or maturity date for the approved ₹1,000 Cr authorization.

The only confirmed maturity effect is from the separate ₹500 Cr NCD allotment completed on September 30, 2026:

• Coupon: 7.81% annually
• Structure: Bullet repayment
• Maturity: September 28, 2029 ^[5]

Therefore, that tranche adds a 2029 bullet maturity rather than a principal repayment within the following 24 months. However, as of September 30, 2026, the company already had ₹1,623.2 Cr of long-term borrowings and ₹2,265.1 Cr of short-term borrowings, including current maturities. ^[2] Whether the proposed ₹1,000 Cr issuance reduces that near-term maturity concentration depends on whether the proceeds refinance short-term/current-maturity debt; that use of proceeds has not been specified.

Apollo remains less levered than CEAT but materially more reliant on debt than MRF. The ₹10,000 million approval equals ₹1,000 Cr, but it is only an approved borrowing programme, subject to shareholder approval—not debt already drawn. ^[7]

Leverage snapshot

The cleanest common comparison is consolidated Q1 FY27:

The latest reported CEAT number has moved higher: its consolidated debt-to-equity ratio was 0.78x at September 30, 2026, versus 0.60x at March 31, 2026; outstanding debt was ₹3,846 Cr and net worth ₹4,961 Cr. ^[16] Apollo’s latest Q2 disclosure does not provide a directly comparable post-approval debt-to-equity ratio, but it reports net debt of ₹3,259.9 Cr and TTM EBITDA of ₹2,652.7 Cr, implying net debt/EBITDA of 1.23x. ^[2]

If Apollo were to issue the full ₹1,000 Cr and cash and EBITDA remained unchanged, net debt/EBITDA would mechanically increase to approximately 1.61x, derived from ₹3,259.9 Cr plus ₹1,000 Cr divided by ₹2,652.7 Cr. This is an illustration, not a reported pro forma ratio.

Reliance on long-term instruments for expansion

• Apollo Tyres: The funding direction is becoming more debt-instrument-led, although the new approval is not explicitly earmarked only for capacity expansion. At September 30, 2026, Apollo reported long-term borrowings of ₹1,623.2 Cr and short-term borrowings, including current maturities, of ₹2,265.1 Cr. ^[2] Long-term borrowings therefore represented about 41.7% of gross borrowings, on a derived basis. Apollo had also recently allotted ₹500 Cr of secured NCDs with a 7.81% coupon and bullet maturity in September 2029. ^[5] Rating commentary indicates that Apollo’s planned capex of approximately ₹580 Cr over FY27–FY29 is to be funded through a mix of debt and internal accruals. ^[17]
• CEAT: CEAT has the clearest disclosed link between expansion and debt funding. Its ₹1,205 Cr two-wheeler capacity expansion, targeted for completion by FY31, is to be financed through a mix of internal accruals and debt. ^[18] It also had ₹250 Cr of NCDs and ₹850 Cr of commercial paper outstanding at September 30, 2026. ^[19] Earlier, CEAT approved NCD issuance of up to ₹500 Cr for purposes including capacity expansion, debt-cost reduction and working capital. ^[20] Thus, CEAT’s expansion programme is more visibly dependent on external funding, consistent with its higher debt-to-equity ratio.
• MRF: MRF is the outlier. Its FY26 annual-report debt-to-equity ratio was 0.02x, explicitly defined as long-term debt divided by shareholders’ equity. ^[21] That is not directly comparable with Apollo’s and CEAT’s broader debt-to-equity measures; on the common Q1 FY27 structured measure, MRF was still only 0.11x. ^[13] MRF’s capacity expansion across plants is disclosed, but the company has not specified a debt-versus-internal-accrual funding split for that programme. ^[22] Its FY26 gearing ratio was 6.53%, down from 10.84%, while net debt was ₹1,428.7 Cr. ^[23]

Implication: Apollo’s NCD approval increases financing flexibility for capex and refinancing, but does not yet make its leverage comparable to CEAT’s 0.78x. CEAT is the most debt-dependent of the three for expansion. MRF is funding growth from a much stronger balance sheet and carries very little long-term debt; however, its current borrowings and working-capital facilities mean it is not debt-free. The key Apollo monitor is whether the ₹1,000 Cr approval is actually drawn, its final maturity structure, and whether proceeds fund productive capacity or refinance existing obligations.