Tata Motors jumps on garnering Rs 9040.56 crore from rights issue

Tata Motors rose 4.67% to Rs 511 at 12:15 IST on BSE after the company said its rights issue was subscribed 1.21 times, resulting in a collection of Rs 9040.56 crore.

The announcement was made after market hours yesterday, 7 May 2015.

Meanwhile, the BSE Sensex was up 427.32 points, or 1.61%, to 27,026.43.

On BSE, so far 2.09 lakh shares were traded in the counter, compared with an average volume of 3.56 lakh shares in the past one quarter.

The stock hit a high of Rs 512.80 and a low of Rs 497 so far during the day. The stock hit a record high of Rs 605.32 on 3 February 2015. The stock hit a 52-week low of Rs 402.57 on 30 May 2014.

The stock had underperformed the market over the past one month till 7 May 2015, falling 12.83% compared with 6.72% fall in the Sensex. The scrip had also underperformed the market in past one quarter, sliding 11.85% as against Sensex's 7.38% fall.

The large-cap company has an equity capital of Rs 577.47 crore. Face value per share is Rs 2.

Tata Motors announced the closing of its Rs 7500 crore rights issue offer period on 2 May 2015. Tata Motors offered up to 15.06 crore ordinary shares of face value Rs 2 for cash at a price of Rs 450 (including a premium of Rs 448) each in the ratio of 6 ordinary shares for every 109 fully paid-up ordinary shares and up to 2.65 crore 'A' ordinary shares of face value Rs 2 at a price of Rs 271 (including a premium of Rs 269) each in the ratio of 6 'A' ordinary shares for every 109 fully paid-up 'A' ordinary shares, in each case on a rights basis to eligible shareholders in respect of shares held on the book closure date of 8 April 2015 (the "share issue").

The share issue commenced on 17 April 2015 and closed on 2 May 2015. Tata Motors also facilitated participation in the share issue by eligible holders of its American Depositary Shares by offering up to 64.09 lakh American Depositary Shares, each representing 5 ordinary shares (ADSs), at a price of $39.42 per ADS at the rate of 0.055045 ADS rights for each ADS held as of the close of business on 7 April 2015 (New York City time).

The share issue was oversubscribed by 1.21 times and Tata Motors collected an amount of Rs 9040.56 crore on applications. Ordinary shares were oversubscribed by 1.17 times, with an amount of Rs 7956.73 crore collected on applications and 'A' ordinary shares were oversubscribed by 1.51 times, with an amount of Rs 1083.83 crore collected on applications.

"We value the positive and encouraging response of our shareholders in supporting this raising of capital, and would like to thank them for their trust and confidence." said C. Ramakrishnan, Chief Financial Officer, Tata Motors.

The proceeds from the share issue are intended to be used for funding expenditure towards plant and machinery, research and product development, repayment in full or in part of certain long-term and short-term borrowings, and general corporate purposes.

Tata Motors' consolidated net profit fell 25.5% to Rs 3580.72 crore on 8.8% growth in net sales to Rs 69121.61 crore in Q3 December 2014 over Q3 December 2013.

Tata Motors is India's largest automobile company. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand, South Africa and Indonesia.

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