The Tata Group is prepared to pick up more than its share in the proposed mega-rights issue of Tata Engineering that is to hit the market next month.
Speaking at Tata Engineering's annual general meeting today, group chairman Ratan Tata, said: "If shareholders do not pick up their entitlement to the rights issue, the promoter group will."
He added: "The move is aimed at increasing shareholders confidence in the promoters, and not just a means to hike stake."
The auto major on Monday said it will prune down the size of the rights issue to raise a maximum of Rs 978 crore, down from the earlier proposed Rs 1,382 crore.
Industry watchers have expressed apprehension that following the Rs 500 crore loss last year, and the Rs 98.9 crore loss again in the first quarter, the rights issue could face resistance.
On the company's dismal performance, Tata said, "I am disappointed more than anyone else on the huge loss and it is the first time in the company's history that we have skipped dividend. We are conscious of this fact and will make it up in subsequent years."
He added that a single year's performance does not mark the death of the company and said he was confident that the team would bring the company back into good health.
Tata cited examples of global auto majors Ford and Daimler who incurred huge losses in the past but have since bounced back as industry leaders.
Tata said, "It all depends on the volumes. Once the volumes pick up, we will bounce back."
Tata Engineering may change name
Tata Engineering is considering a change of name to either Tata Motors or Tata Automobiles which may happen after some time.
Answering shareholders' query at the AGM, chairman Ratan Tata said, "The company is considering to change of name but it will not happen immediately." He added that the two possibilities the company was looking at were Tata Motors or Tata Automobiles. The move is aimed as the current name Tata Engineering does not signify the exact business the company.
