Board encouraged by initial response.
Tata Motors, the country’s biggest vehicle maker, has decided to increase the size of its institutional share sale by 43 per cent to $750 million (Rs 3,330 crore), following an encouraging response from investors.
The board of directors has authorised raising the size of the offering of ‘A’ ordinary shares from up to $400 million (Rs 1,774 crore) to up to $550 million (Rs 2,440 crore), a release from the company stated today.
On Friday, Tata Motors had informed regarding the launch of an issue of ordinary shares and ‘A’ ordinary shares through the qualified institutional placement (QIP) route, for a base amount of $525 million (Rs 2,330 crore), comprising $200 million (Rs 887 crore) of ordinary shares and $325 million (Rs 1,443 crore) of ‘A’ ordinary shares.
The company is raising funds to reduce its debts, capital expenditure, long term working capital, growth objectives, general corporate purposes among other purposes.
It had taken shareholders approval earlier this year through a postal ballot to raise Rs 4,700 crore through various of means such as issue of shares, bonds, debentures, warrants and other equity linked instruments in the domestic and international markets in one or more tranches.
The company has to repay debts of Rs 8,000 crore this year, beside meeting capital expenditure of Rs 2,500-3,000 crore on a stand-alone level.