Tata Power Rights Issue oversubscribed 1.96 times

Company had offered up to 33 crore equity shares at a price of Rs 60 per share for an amount aggregating to Rs 1,993.38 crore on a rights basis

Tata Power today said it has raised nearly Rs 2,000 crore by selling shares to existing shareholders for which it received nearly double the required bids.

Tata Power had offered up to 33 crore equity shares at a price of Rs 60 per share for an amount aggregating to Rs 1,993.38 crore on a rights basis, which closed on April 15, to the existing shareholders.

The Issue has been oversubscribed by 1.96 times, wherein Tata Power collected Rs 3,916.41 crore on application. The rights issue opened on March 31.

The company received over 89,000 applications for the rights issue.

The proceeds from the issue will be utilised for capital expenditure and repaying debt.

Tata Power had said it would extend Rs 639.51 crore from the funds raised to Coastal Gujarat Power Ltd, the operator of the 4,000 MW Mundra ultra mega power project in Gujarat, for part repayment of borrowings, according to the offer document.

About Rs 533 crore from the net proceeds will be used to partly repay certain borrowings of Tata Power.

The Lead Managers to the Issue were JM Financial Institutional Securities Ltd, BNP Paribas, HSBC Securities & Capital Markets (India) Private Limited, Kotak Mahindra Capital Company Ltd and SBI Capital Markets Ltd.

The company's total long-term outstanding debt from banks and financial institutions stood at Rs 9,091.77 crore at the end of December 2013.

Tata Power has earmarked Rs 300 crore for generation, transmission and distribution of electricity in the Mumbai licence area, while Rs 498.35 crore would be used for general corporate purposes.

Tata Power has an operational capacity of more than 8,560 MW while over 840 MW of projects are being set up.

The company's scrip closed at Rs 79.95, up 2.43%, on the BSE.