Tata Projects eyes Rs 2,500 cr via rights issue at Rs 6,700 cr valuation

Tata Projects, the construction subsidiary of the Tata Group, is raising Rs 2,500 crore through a rights issue at a valuation of Rs 6,700 crore.

 

According to a company filing, the rights issue is priced at Rs 163.1 per share, which includes a premium of Rs 158.1. Shareholders participating in the issue include Tata Sons, Tata Power, and Tata Chemicals.

 

Of the total amount, Rs 97.86 per share has been paid upon application, while the balance will be payable on the first and final call, as determined by the board within a year from the issue’s closure, the company said.

 

Tata Sons will invest Rs 1,433 crore in the rights issue while Tata Power will invest Rs 770 crore in the rights issue.

 

According to rating firm CRISIL, the company’s order book of around Rs 40,700 crore (as of December 2024), is spread across different segments, and its growing share of urban infrastructure orders offer strong revenue visibility for the next 3-4 years.

 

Tata Projects has executed complex projects such as a freight corridor, metros, and heavy civil projects through joint ventures, aiming to build execution capabilities in new segments.

 

The company has undertaken a number of independent projects in the past 2-3 years and has bagged several large projects in the refinery, industrial, and power segments. 

 

A large share of projects from private and Tata Group entities, along with focus on high-margin projects, would improve profitability over the medium term, CRISIL said in a statement in February this year. The funds raised via rights issue will be used for expansion.