Tata Industries raises Rs 248 crore rights issue

Tata Industries, the holding company of the new economy businesses of the Rs 52,000 crore Tata group, last week raised Rs 248 crore through a rights issue.

The money raised through the rights issue has been used to redeem five-year exchangeable premium bonds (EPBs) floated by Tata Industries in January 1999. The EPBs were redeemed on January 29.

The exercise has resulted in a reduction in the cost of debt for Tata Industries and a rise in its equity base. The latest figures are not available.

As on March 31, 2002, the company had an equity base of Rs 446.49 crore and a debt, inclusive of non-convertible debentures, of Rs 1,145.68 crore. Its reserves and surplus in March 2002 were to the tune of Rs 231.72 crore.

The Rs 200 crore EPBs carried a redemption yield of 15.1 per cent. The redemption amount, inclusive of the redemption yield, was Rs 404 crore.

Apart from raising its equity through the rights issue, Tata Industries also raised money from the market to take care of the redemption of EPBs.

Confirming the development, SH Rajadhyaksha, senior vice-president (finance) and company secretary of Tata Industries, told Business Standard : "We have redeemed the EPBs. Proceeds of the Rs 248 crore rights issue of Tata Industries have been used to redeem the bonds. The rights issue was fully subscribed."

The bulk of the outgo was through Tata Sons, the largest shareholder of Tata Industries.

Post rights issue, there has not been any significant change in the holding pattern of Tata Industries. The Hong Kong-based Jardine Matheson group will continue to hold 20 per cent stake in Tata Industries.

Within the Tata group, it is believed that Tata Sons' stake has gone up marginally even though over all the group continues to hold an 80 per cent stake in Tata Industries.

Tata executives were not willing to divulge the details of the holding pattern since Tata Industries is an unlisted company.