Tata Motors skids after riding to a new high

Shares of Tata Motors rose to a new high on Wednesday on reports that the country’s largest truck and bus maker plans to raise $700-750 million through issue of shares with differential voting rights, or DVRs. The stock, however, could not sustain higher levels and ended in red.

“Tata Motors has not taken any decision. Any report, indicating any decision on the part of the company, is speculative. The automaker is still exploring all options for raising funds,” said a company spokesperson. The company is planning to raise about $1 billion, or Rs 4,700 crore, to retire debt.

It is considering various options, including issue of ordinary shares, ‘A’ ordinary shares, convertible bonds, debentures, warrants or other equity-linked securities in the domestic and/or international markets in one or more tranches.

It is also learnt that the company may go for a sponsored overseas issue of DVRs after some investors expressed discomfort with the steep discount they fetch in relation to ordinary shares. The stock opened the day at a record high of Rs 1,077. It, however, lost ground on profit-taking at higher levels, and ended the day at Rs 1,024, down 3% over its previous close. The company’s DVRs slipped 3.6% to Rs 743.8.


Contributed by Lijee Philip & Shailesh Menon