Tata Finance Promoters Hike Pie To 51% In Q3

The promoters of Tata Finance have scaled up their holding by a whopping 33 per cent to 50.8 per cent during the third quarter (Q3) ended December 31 2001. During the September quarter, their holding was 17.88 per cent.

However, the rise in promoters' stake corresponded with a fall in the stake of private corporate bodies (PCBs) during the quarter. PCB holding was down at 14.15 per cent from 46.99 per cent as on September 30.

A Tata Finance official spokesman said the 17.88 per cent promoters' holding shown in the previous quarters reflected the holding of Tata Industries. The holding of other group companies in Tata Finance was clubbed under PCBs.

Tata Finance sources further clarified that the rise in promoters' holding has no connection with the decision to buy back the shares issued earlier through the company's rights issue. The re-arrangement of group companies was undertaken to "make things simpler".

However, over the last quarter all Tata group holdings in the company have been consolidated as promoter holding.

As per the company's filings with the stock exchanges, the shareholding as on December 31 shows that institutional investors, which includes mutual funds and the Unit Trust of India, banks, financial institutions, insurance companies, have a paltry 1.01 per cent, non-resident Indians and overseas corporate bodies hold 0.2 per cent, director and relatives 0.01 per cent and the Indian public at 33.84 per cent.

Analysts tracking the company said, with other Tata companies now under the promoter fold, it would be easier for the group to assist Tata Finance with its restructuring mode.

While Tata Finance posted a net loss of Rs 17.2 crore during the September quarter, net loss for the year ended June 30 stood at Rs 395.5 crore against a net profit of Rs 56.7 crore during the same period last year.

The Tata group decided to pump in around Rs 300 crore through equity for the makeover. Following the breach of Reserve Bank of India norms last year and contradictions in the letter of offer dated March 23, 2001, for it rights issue by Tata Finance, the company had subsequently proposed to acquire the issued cumulative convertible preference (CCP) shares in accordance with the creeping acquisition norms of the Securities and Exchange Board of India's substantial acquisition of shares and takeovers regulations.

The Tata Finance scrip today closed at Rs 17 on the Bombay Stock Exchange and at Rs 17.10 on the National Stock Exchange.