The Hindu Business Line : Tata Finance to hike authorised capital

TATA Finance Ltd is amending its articles of association to increase its authorised capital to accommodate an issue of cumulative redeemable preference shares for 175 crore.

The company has decided to increase the authorised capital base from Rs 745 crore to Rs 920 crore. The existing capital base is divided into 40 crore equity shares of Rs 10 each, 3.75 crore of cumulative redeemable preference shares of Rs 100 each and 1.45 crore cumulative convertible preference shares of Rs 100 each.

The increased portion of the capital base will consist of Rs 1.75 crore cumulative redeemable preference shares of Rs 100 each. The company has sought the consent of its shareholders for making the necessary amendments at its coming annual general meeting (AGM).

"To facilitate the redemption of existing cumulative redeemable preference shares, it is proposed to issue cumulative redeemable preference shares up to an aggregate nominal value of Rs 175 crore, in one or more tranches, to be privately placed... ," Mr Nariman Khan, General Manager and Company Secretary, stated in the AGM notice.

For the year ended March 31, 2004, Tata Finance's total income dropped to Rs 322.08 crore from Rs 401.45 crore in the previous financial year. However, it registered a net profit of Rs 16.76 crore against a net loss of Rs 49.67 crore in 2002-03.

According to the director's report, disbursements of the asset finance business increased but due to lower interest rates, the total income of the company suffered in the last fiscal.

"During the year, the total disbursals of the asset finance division comprising commercial vehicles, construction equipment, cars and two wheelers financing increased from Rs 1,028 crore to Rs 1,415 crore reflecting an increase of 38 per cent," the report stated.

Meanwhile, the company has discontinued fresh financing activities for leasing as well as corporate lending. After repayments, the total lease portfolio has reduced to Rs 163 crore as on March 31, 2004, from Rs 212 crore on March 31, 2003.