Tata Motors net flat; to raise Rs 7.2k cr

Consolidated revenues for the fiscal stood at Rs 40,340.79 crore, compared with Rs 36,922.61 crore over FY07, a growth of 9.3%. On a stand-alone basis, the company?s PAT grew by 6% to Rs 2,028.92 crore for the fiscal, from Rs 1,913.46 crore the previous year.

Tata Motors also announced the raising of about Rs 7,200 crore through three simultaneous but unlinked rights issues. The fund-raising proposals will be mainly used to finance the Jaguar-Land Rover acquisition (through a wholly owned subsidiary of Tata Motors in the UK), which is expected to be completed by the end of this quarter, at cost of $2.3 billion.

Shares of Tata Motors closed at Rs 634.75 on Wednesday on the BSE, up 1.30%. The company did not announce its Q4 results, in line with its new accounting practice, it said.

Talking on the sidelines of a media briefing, Tata Motors managing director Ravi Kant expressed concern about the economic environment. He said it has been an extremely challenging year for the industry, which is affected by external factors like high input costs including steel and tyres, and a sudden contraction of financing. The current fiscal could be worse, he said.

He added that rising oil prices is also affecting the market, and the company will be looking at more fuel-efficient vehicles. To tackle the issue of vehicle financing, Kant said, ?Financing is the key thing and we will see how we can help through our financing arm.?

During the year, the company focused on several cost reduction measures. There have been delays in the introduction of two new products, but they should be launched in the very near future. The company has set a target of 100 product launches over four years. It has a Rs 10,000-crore capex plan over the next three to four years.

Regarding the fund-raising plans, the company said, ?Though the initial acquisition cost will be financed through bridging loans provided by a syndicate of banks, these loans would be fully repaid through the capital raising schemes.?

On completion of the rights issues, the company also proposes to raise about $500-600 million through the issue of securities in foreign markets on terms to be decided at that time, as already announced earlier. The company plans to offer a rights issue of equity shares up to Rs 2,200 crore and a rights issue of A-equity shares carrying differential voting rights (1 vote for every 10 A-equity shares) up to Rs 2,000 crore.

It also proposes to issue an A-rights issue of five-year 0.5% convertible preference shares up to Rs 3,000 crore, optionally convertible into A-equity shares after three years, but before five years from the date of allotment. ?The precise terms of the issues are still to be decided,? said C Ramakrishnan, CFO, Tata Motors.