News Archive  

Tata Motors: Plans to Meet Requirement with Enough Capital Flow

Tata Motors, India’s biggest automaker, will raise a whopping amount of Rs 4,700 crore through several channels and a smart combination of instruments to meet capital requirements and cut debt.
 Tata Motors: Plans to Meet Requirement with Enough Capi..
 
 
Tata Motors, India’s biggest automaker, will raise a whopping amount of Rs 4,700 crore through several channels and a smart combination of instruments to meet capital requirements and cut debt.

Tata Motors, which is a part of the huge business conglomerate Tata Group, said that the board decision has been in favour of raising the amount through an issue of shares, bonds, warrants, debentures and other equity-linked instruments in the domestic as well as international markets. In a filing to the Bombay Stock Exchange (BSE), Tata Motors said “It would seek shareholders’ approval through a postal ballot. “The timing and structure of the issues will be decided depending upon market conditions, post shareholders’ and other approvals.”

Tata Motors has to repay debts amounting to Rs 8,000 crore in this financial year, along with that it also has to cope up with a capital expenditure worth Rs 2,500-3,000 crore. Now, Tata Motors also has a debt worth Rs 18,800 crore on a standalone basis, and the debt equity stands at a ratio of 2.05:1, which the company is aiming to bring down at 1:1, if as per the analysts expectation, the promoters dilute their stake, though the extent of dilution is not decided yet, as it is, the company too is expected to emerge with more clarity in the near future. Analysts expect promoters to dilute their stake, but it’s too early to state the extent of dilution. The company is expected to come out with more clarity in the near future.

Tata Motors’ shares rose to 2.35 % to Rs 787.50 on the Bombay Stock Exchange. In the month of October,’09, the company had issued global depository shares and convertible notes to raise an amount of $750 million (Rs 3,500 crore). A city-based analyst, going by the company’s track record said, “It is very interesting to see at what price the company issues the shares. If they are at a discount, then investors may lose confidence in the stock, but if they are at a premium, then there will be fear of the issue being overpriced.”

 
Join Businessfriend today. Where social networking leads to productivity


Featured Articles + MORE Featured Articles >>