Trent surges 5% on board nod for preferential issue of shares to Tata Sons

Trent shares moved higher by 5 per cent to Rs 415 in intra-day trade on the BSE in an otherwise weak market on Wednesday, after the company announced plans to raise up to Rs 1,550 crore through a combination of issuance of shares to its promoter Tata Sons on a preferential basis and other options to fund its expansion.

As of March 31, 2019, Tata Sons held 27.74 per cent stake in Trent.

The stock was trading close to its all-time high level of Rs 425 touched on June 4, 2019 in intra-day trade. Till 03:07 pm, a combined 414,138 equity shares had changed hands on the NSE and BSE. In comparison, the S&P BSE Sensex was trading flat at 39,066 points.

The Tata Group company which is engaged in specialty retail business said it was witnessing positive traction for its lifestyle retail concepts and consequently pursuing a substantially accelerated growth programme across the Westside, Zudio and Star formats. The foregoing fund raising proposal was considered by the board in the context of the Company's funding requirements given the growth plans.

"The board of directors at its meeting held on Tuesday approved issue of equity shares on a preferential basis to Tata Sons, promoter of the company, subject to such regulatory/ statutory approvals as may be required, including approval of the shareholders of the company," Trent said in a regulatory filing.

The total amount to be raised from issuance of shares to the promoter is about Rs 950 crore, the company said.

Separately, Trent said, the board of directors also appointed a committee of the board to explore options to raise additional funds not exceeding Rs 600 crore in financial year 2019-20 by issue of equity shares or other securities including through qualified institutional placement, rights issue or any other permissible mode or a combination thereof.