 "Tata Sons raises Tata Electronics' equity capital to Rs 10,000 crore")
Tata Sons increased Tata Electronics' authorised equity capital to Rs 10,000 crore in the last financial year, a fivefold rise. Given the current paid-up capital of Rs 3,961 crore, this suggests a potential new investment exceeding Rs 6,000 crore, according to a report by The Economic Times.
According to the latest filings with the Registrar of Companies, Tata Sons invested Rs 2,140 crore in equity capital in Tata Electronics in FY24, marking the highest annual investment since the company's establishment in 2020.
The company did not provide an explanation for the fundraising. According to filings, the company had secured loans amounting to Rs 6,311 crore by March 2024.
Tata Electronics represents the group's newest venture in electronics manufacturing services. The company recently purchased Wistron's iPhone manufacturing facility in Karnataka.
In February, the company revealed plans to invest Rs 91,000 crore in a plant in Gujarat.
The company intends to establish a large-scale semiconductor fabrication plant in collaboration with PSMC and invest an additional Rs 27,000 crore to develop a new semiconductor assembly and testing facility in Assam.
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The report quoted Mohit Yadav, founder at business intelligence firm AltInfo, as saying, "With its current capital structure of Rs 3,900 crore in equity, and rest debt, Tata Electronics is poised for a significant expansion. Their planned Rs 91,000-crore chip plant investment far exceeds their current resources, indicating substantial future fundraising."
According to the filings, Tata Electronics had an authorised capital of Rs 2,000 crore a year ago. The report said analysts have indicated that part of the company's secured loan may have been repaid.
For financial year 2023, Tata Electronics reported revenue of Rs 463 crore from producing components like mobile phone enclosures, alongside a net loss of Rs 531 crore.
In the electronic manufacturing services sector, Tata Electronics competes with companies such as Dixon, Foxconn, and Pegatron. The company has announced that its two major semiconductor projects are expected to generate around 47,000 direct and indirect jobs.
The global semiconductor market is projected to reach $1 trillion by 2030, with domestic demand in India expected to exceed $110 billion. Tata's entry into semiconductor manufacturing is seen as a move that will enhance global supply chain resilience and establish India as a significant player in this industry.