Tata Motors, maker of Jaguar and Land Rover vehicles, plunged the most on record in New York after sales declined in India and the company sought loans from the public to refinance the acquisition of the luxury brands.
Tata Motors’s American depositary receipt slid 18 per cent to $3.75 in New York yesterday, the most since it began trading on September 27, 2004. They have declined 80 per cent this year.
The Mumbai-based company’s vehicle sales plunged 30 per cent in November, the most in at least four years, as higher loan rates and a slowing economy damped demand for trucks and cars. The automaker yesterday turned to the public to raise loans for the first time in 13 years as the credit crunch limits its ability to refinance $3 billion of bridge loans taken to buy Jaguar and Land Rover.
“The slowdown in the car market hurts Tata Motors’s business particularly hard as it lacks the brand to compete effectively,” Govindarajan Chellappa, a Mumbai-based analyst at Credit Suisse, wrote yesterday. “Jaguar and Land Rover are also likely to face severe demand contraction over the next year due to negative wealth effect.”
India’s biggest truckmaker said yesterday that total vehicle sales declined to 32,696 in India and overseas last month, compared with 46,947 a year earlier. Tata Motors doesn’t give monthly sales of its luxury units. The company’s commercial vehicle sales in India fell 40 per cent to 16,229, it said.
Credit Suisse’s Chellappa downgraded the company to “neutral’’ from “outperform.’’
Tata Motors is offering as much as 11 per cent annual interest on three-year deposits to raise money from the public, spokesman Debasis Ray said yesterday. A government bond with a similar maturity offers a 6.97 per cent yield.