Tata Motors seeks shareholders' approval for Rs 7500 cr rights issue

The company closed 2014 with raising of Rs 300 cr taking year total to Rs 13,700 cr raised at group level that included JLR

Tata Motors, India’s largest vehicle manufacturer, has said it will seek shareholders’ approval to raise Rs 7,500 crore through a rights issue.

The company’s board of directors held a meeting in this regard on Tuesday. The rights issue will be for both classes of shares, Ordinary shares and ‘A’ Ordinary shares. The company has clarified that the proceeds would be used for its growth plans as well as for reducing debt.

“The quantum, pricing and timing of the issue will be decided at a later point in time, depending on the market conditions after shareholders’ and other approvals,” it said.  

Tata Motors closed 2014 (calendar year) by raising Rs 300 crore, taking the year’s total to Rs 13,700 crore, which was raised at the group level, which included Jaguar Land Rover (JLR).

In 2014, Tata Motors raised $750 million (Rs 4,600 crore) in what was its second fund-raising activity that year. It got $4.2 billion worth of orders for the issue of senior unsecured notes.

This was followed by the issue of senior notes of $500 million (Rs 3,000 crore) by JLR. The issue was done to fund JLR’s growth and capital spending plans. In May 2014, the company’s wholly owned-subsidiary TML Holdings raised $300 million through an issue of debt securities having fixed interest rate.

In 2014, TML Holdings which also owns Jaguar and Land Rover raised S$350 million through senior fixed notes.

In January 2014, JLR had witnessed the issue of £400 million (Rs 4,000 crore) senior notes, which will mature in 2022, made to investors.

Tata Motors will spend Rs 3,500-4000 crore on capital expenditure at the stand-alone level in the current financial year (FY15). In FY14, it had spent Rs 3,094 crore on capex, design and development of products.

With the launch of Zest and Bolt, Tata Motors is gearing up to launch two new models every year to keep customers excited. A compact sports utility vehicle, a more powerful Nano, a refreshed Safari Storme and several new upgrades in the commercial vehicle range is also lined up by the Mumbai-based company.