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Our Bureau

Mumbai, March 11 Tata Motors, which is all set to acquire the British luxury cars Jaguar and Land Rover, has said that it would be raising Rs 4,000 crore from the market through issue of securities.

The board of directors at its meeting held on Tuesday approved the proposal, the company said in a statement to the stock exchanges later in the day. The funds, which would be raised in India and overseas in one or more tranches, will be for the company’s expansion in India and abroad and for strategic acquisitions and alliances.

In addition to this, the company may also go for raising debts, indicated a spokesperson.

Tata Motors shares closed at Rs 658.55 , down by 2.28 per cent from the previous close.

As on December 31, 2007, the net debt outstanding of Tata Motors is Rs 3,525 crore and the company has enough headroom to go for more borrowings, said the spokesman.

However, “Going forward, this would put certain stress on the company,” said an analyst. “The benefit of the expansion wouldn’t accrue in one year. That means, the profit won’t be commensurate with the upfront interest cost burden.

More Stories on : Cars | Mergers & Acquisitions | Overseas Borrowings | Tata Motors Ltd

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