Tata Motors gains as board approves terms of rights issue

The stock was up 1% at Rs 536 on the National Stock Exchange.

Shares of Tata Motors were trading higher by 1% at Rs 536 on the National Stock Exchange (NSE), after the company said its board approved the rights issue of equity shares in the ratio of 6:109.

The auto maker has fixed issue price of Rs 450 per share for ordinary shares and of Rs 271 per share for ‘A’ ordinary shares or shares with differential voting rights (DVR). The company proposes to raise Rs 7,500 crore through rights issue.

“The company will issue 6 fully paid-up ordinary shares for every 109 fully paid-up ordinary shares held as on the book closure date and 6 fully paid-up ‘A' ordinary shares for every 109 fully paid-up ‘A' ordinary shares held as on the book closure date,” Tata Motors said in a statement.

The board also approved the buy-back of secured non-convertible debentures issued by the company in May 2009, maturity date being March 31, 2016, face value of Rs 1,250 crore, as part of its debt restructuring programme to ensure a healthy debt equity mix, balanced maturity profile, better terms that would include lower cost of debt, it added.

The stock opened at Rs 536 and touched a high of Rs 546 on the NSE in early morning trade. A combined 3.69 million shares changed hands on the counter till 1304 hours on the NSE and BSE.

On Tuesday, March 24, the stock closed down 3.44% at Rs 532 on the NSE. It hit a record high of Rs 612 on February 3, 2015.

Meanwhile, shares of Tata Motors DVR were up 0.72% at Rs 315 on the NSE.