Fiat India Automobiles Limited, a 50:50 joint venture between Fiat Group Automobiles (Fiat) and Tata Motors Ltd (Tata), is believed to have raised a loan worth $510 million (Rs 2,448 crore), a Citigroup India spokesman was quoted by a news agency on Monday. The report quoted the spokesperson saying the rupee and euro loan was arranged by Citigroup.

Fiat holds a 50% stake in the joint venture company. The company in March 2008 had expressed interest to infuse Rs 2,341 crore to expand its facility in Ranjangaon plant in Pune. This was over and above the investment of Rs 1,679 crore to the overall Rs 4,020-crore investments in the Ranjangaon plant. The company had said it plans to ramp up its operations to produce up to 2 lakh cars, 3 lakh engines and 3 lakh automotive parts and accessories. These funds are expected to be used by the company for the same.

Currently, the installed capacity at the Ranjangaon plant is 1.6 lakh units. Recently, at the Grande Punto launch in New Delhi, Silverio Bonfiglioli, FGA International, chief operating officer, Fiat Group Automobiles, had said, ?Fiat has invested 0.7 billion euro (Rs 4,795 crore) in India till now.?

The Ranjangaon plant manufactures the Palio Stile 1.1, 1.3, 1.6 models, the Linea and now the Punto. Fiat’s 1.3-litre multijet and 1.2 and 1.4 Fire gasoline engines are rolled out from this facility. It also manufacturers Tata passenger and next generation cars.

?Like the M&M-Renault joint venture, this joint venture is also in trouble and facing losses. The loss can be anywhere around Rs 600 crore for the last financial year,? said an auto analyst.

Incidentally, Tata Motors has started the delivery of its Nano this month.

An analyst said that the fund raising could also mean Nano being assembled at the JV’s Ranjangaon plant considering that the Sanand plant will take another six months to commence operations. Interestingly, the plan B for rolling out the Nano had included Tata Motors’ Pune plant for certain parts of the car.

When contacted, the company denied to comment on the matter.