Tata Motors sold $750 million of stock to reduce debt

Article by Christian Andrei, on October 5, 2010

Insiders say that $750 million of stock was sold by Tata Motors Ltd. to reduce debt after investors bid for more than three times the shares originally offered. The sources said that the share sale that began Oct. 1 was increased from $525 million due to the demand from institutional investors.

Bloomberg data show that Tata Motors, which owns Jaguar Land Rover, also raised $750 million a year ago selling convertible bonds and global depositary receipts to reduce debts that now total to about $4.5 billion.

In August, Standard & Poor’s raised its rating on Tata Motors’ debt as a result of the fundraising and an increase in luxury-vehicle sales along with the global economic recovery.

Mahantesh Sabarad, a Mumbai-based analyst at Fortune Equity Brokers (India) Ltd., describes the company’s balance sheet to be “much healthier today.”

Sabarad added that it’s possible that Tata won’t have to sell more shares after this issue as it will lead to cash flows that are “good enough” to create funds for debt repayment and capital expenditure.

Tata Motors has yet to comment on the share sale. The sources also said that the issue includes $550 million of so-called A shares with differential voting rights.

According to a statement to the Bombay Stock Exchange, Tata Motors had originally planned to sell $325 million of A-shares with an option to raise the offer in response to demand. Tata Motors said that it has also sold $200 million of ordinary shares. [via Bloomberg]

Topics: tata motors, shares

If you liked the article, share on:


Login or Create new account to add a comment!


It wasn’t too long ago when Maserati took the wraps off what appears to be the most gorgeous concept coupe ever made. The Alfieri coupe premiered at the 2014 Geneva...
by - October 23, 2016
Many have been excited with the impending arrival of the next-generation Jeep Wrangler and the new 2019 Jeep Grand Wagoneer, which is slated to be the brand’s new range-topping model....
by - October 21, 2016
Chevrolet has taken the wraps off its new Chevrolet Colorado ZH2 at the fall meeting of the Association of the United States Army (AUSA). Tagged as the most extreme fuel-cell-powered...
by - October 21, 2016
Honda has unveiled the fifth generation of its hot-selling SUV – the 2017 Honda CR-V. The latest iteration of the CR-V should help it maintain its benchmark status in the...
by - October 21, 2016
Many are already expecting BMW to launch an ultra luxurious SUV that will serve at its new flagship by late 2018. Larger than the X5 and X6, the new X7...
by - October 21, 2016