India: Tata Sons may raise $1b to finance a fresh equity infusion into group firms

Tata Sons Ltd is considering a $1 billion fund-raise to finance a fresh equity infusion into group companies, including Tata Motors Ltd and Tata Power Ltd, two people aware of the development said.

The board of the Tata group holding company discussed possible avenues for the fund-raise at its meeting on Friday, the people cited above said on condition of anonymity.

“The board discussed various fund-raise options available, and is likely to soon take a final decision in this regard,“ said the first of the two people, adding, “The funds will be raised in both rupee and dollar.”

Revenues of both Tata Motors and Tata Power were impacted as India and much of the world declared sweeping lockdowns following the coronavirus outbreak.

The report said there was little immediate hope of a recovery in its domestic passenger and commercial vehicle segments either. CLSA said Tata Motors’ luxury car unit Jaguar Land Rover (JLR) is the only driver of the firm’s valuation, as revenues from JLR have contributed to 79% of its consolidated sales, while domestic commercial vehicle revenue has fallen 32% from a year earlier.

Earlier this month, Tata Power informed the exchanges it would raise 2,600 crore from promoter Tata Sons through a rights issue to strengthen its balance sheet, which would raise the parent’s shareholding by 10%.

Tata Power recently completed the sale of three ships for $212.8 million, the second asset sale after the divestment of its stake in Cennergi in South Africa for around $110 million.

In a setback, however, earlier this month, Gujarat decided to revoke a previous state government order that allowed it to pass on additional coal procurement costs on the power tariff agreement at its Mundra plant. The decision set back years of negotiations between Tata Power and the five state governments who have agreed to purchase from it, in the backdrop of rising international coal prices making old power purchase agreements unviable.

This article was first published on livemint.com.

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.