New Delhi: Auto major Tata Motors today said its Rs4,147 crore rights issue to part-finance the purchase of British marquee Jaguar and Land Rover was fully subscribed with promoters picking up significant amount of stake.
“The rights issue is 100% subscribed. The promoters have also bought shares... it is significant,” Tata Motors spokesperson told PTI.
While the spokesperson did not give further details, a British media report said that promoters and underwriters were “forced to intervene heavily to prop up” the issue after “investors shunned the offering.”
A report in Financial Times quoted Tata Motors’ Chief Financial Officer C Ramakrishnan as saying, “Given the unprecedented situation... between the promoters and the underwriters, the issue had to be supported.”
The company came out with two unlinked rights offerings on 29 September and it closed on 20 October. Under the offer, it alloted shares in the ratio of one fresh share for every six equity shares of Rs10 each held in the company.
Earlier the company’s board had approved Rs4,147 crore rights issue for part funding its $2.3 billion JLR deal, which was completed in June this year.
Under the rights issue, the company offered ordinary shares at a price of Rs340 per share, aggregating Rs2,186 crore. Further, it alloted ‘A´ ordinary shares (shares with lower voting rights) at a price of Rs305 a piece, amounting Rs1,961 crore.
In September, the home-grown auto major had re-worked its plans to raise Rs7,200 crore long-term capital funds due to volatile stock market conditions.
Since the issue opened on 29 September, Tata Motors’ scrip plunged 31.46% from Rs335.85. It had touched the 52-week low of Rs232.65 on 20 October 20 on the BSE.