Tata Motors sets rights price, ratio

Mumbai, March 25: Tata Motors has fixed the price of ordinary shares at Rs 450 apiece and Class A shares at Rs 271 each for its Rs 7,500-crore rights issue, one of the largest in the domestic capital markets.

In its filing with the BSE today, the company said it would offer six shares for every 109 shares of both ordinary and Class A shares.

The company will offer more than 15.06 crore ordinary shares and 2.65 crore Class A shares that carry lower voting rights vis-a-vis the ordinary shares.

The board today also decided to buy back secured non-convertible debentures issued in May 2009 as part of its debt restructuring programme to ensure a "healthy debt-equity mix, balanced maturity profile and better terms that would include a lower cost of debt''. These debentures were set to mature on March 2016.

The stock markets gave its thumbs-up to the proposed issue with the Tata Motors scrip ending with gains of nearly 2 per cent, or Rs 8.30, at Rs 541.20 on the BSE.

Market analysts said the rights issue was likely to get a good response from shareholders as it had been priced attractively.

Tata Motors intends to utilise Rs 7,500 crore to pare debt and fund expansion. The company plans to introduce two models every year till 2020 to improve its market share in India. Besides, the company will upgrade products and bring in refreshed variants of existing models.

During the third quarter ended December 31, 2014, the company's India business suffered a loss of Rs 2,123 crore despite higher net revenues of Rs 9,056 crore.

Meanwhile, Jaguar Land Rover, owned by Tata Motors has said it will invest £600 million in the UK as part of its expansion plans, including doubling the size of its operations at its headquarters in Coventry. The funds will be pumped into its R&D and manufacturing divisions across three sites in the West Midlands region of England.

Tata Motors