Passenger Cars: Telco To Invest Rs 376 Crore

Tata Engineering is planning to invest Rs 376 crore in its passenger cars business in the next two years, of which Rs 319 crore will be in the current fiscal, the company said in its rights issue prospectus.

The automaker said Rs 70 crore has been earmarked for the development of new variants of the Indica, while another Rs 280 crore will go into normal capital expenditure of the division.

In addition, the auto major is to invest Rs 327 crore in its mainline commercial vehicles business over the next three years, almost half of which will be going into developing new products, particularly in the light and medium commercial vehicles segment.

Tata Engineering also proposes bringing down its cost of capital by prepaying and/or repaying a total of Rs 527 crore of high-cost debt from the proceeds of the Rs 978 crore rights issue. However, despite the pruning of the issue size by almost 30 per cent to Rs 978 crore, the company has almost maintained its estimate of fund requirements at Rs 1,307 crore.

The shortfall, according to the company