Business Daily from THE HINDU group of publications
Friday, Aug 22, 2008
ePaper | Mobile/PDA Version | Audio
Business Daily from THE HINDU group of publications Friday, Aug 22, 2008 ePaper | Mobile/PDA Version | Audio |
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Markets
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Stocks Corporate - Rights Issue
Our Bureau Kolkata, Aug. 21 Though the market reacted positively, on Thursday to the changes in the capital raising plan by Tata Motors; the stock opened with a positive note and touched a high of Rs 444, but closed lower by 1.44 per cent at Rs 418 at close, in line with general market condition. Analysts felt the changed plan, which did not call for further dilution of equity, despite poor market conditions, is actually a positive factor. According to Mr Arun Kejriwal of KRIS, in a falling market, investors ignored this positive development. However, when market benchmark went down by three per cent, the Tata Motors finished better. “This surely a commentary on the development,” said Mr Ajay Jaiswal of Microsec. Tata Motors on Wednesday decided to meet the short fall in capital raising plan through the rights issue by selling of investments at prevailing market prices in the next 8 months. Since the proposed fund raising is for repaying the bride loan (which has to be paid within a specified time frame), for the Jaguar Land Rover acquisition deal, the decline in the domestic market has gone against the original proposal. “Instead of diluting capital further, necessary in this situation, to maintain the quantum of fund to be raised, the company has opted for asset sales. The sales could be at a discount to the peak prices of those assets, but this would cause lesser harm to the valuation than the higher equity dilution would result in for Tata Motors,” Mr Kejriwal said. Tata Motors to prune Rs 7,200-cr rights issue Tata Motors plans 3 types of rights issue More Stories on : Stocks | Rights Issue | Tata Motors Ltd | HCV/LCV/Tractors
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