Tata Motors Said to Hire Citigroup, Credit Suisse to Help Raise $1 Billion
Tata Motors Ltd., the owner of Jaguar Land Rover, hired Citigroup Inc. and Credit Suisse Group AG to raise as much as $1 billion from selling securities, two people with knowledge of the matter said.
The carmaker may tap capital markets in the next month, the people said, declining to be named before a public announcement. The Mumbai-based company is considering options including a private placement, shares with differential voting rights and foreign currency convertible bonds, they said.
Tata Motors, the best-performing stock in the benchmark index in the past year, said in June it plans to raise as much as 47 billion rupees ($1 billion) to pare debt and expand operations. Standard & Poor’s last week raised its rating on the automaker’s debt for the first time in two years as the global economic recovery boosted sales at its luxury-vehicle unit.
“This is one of the best times for Tata Motors to raise the funds,” said Umesh Karne, a Mumbai-based analyst at BRICS Securities Ltd. “Jaguar Land Rover and Tata’s local sales are doing very well.”
Tata Motors fell 0.8 percent to 1,040.45 rupees at close of trading in Mumbai. The shares have gained 31 percent this year.
The company hasn’t determined how it will raise the funds, spokesman Debasis Ray said by telephone, declining to comment further. Debasis Ghosh, a spokesman for Citigroup in Mumbai, declined to comment. Adam Harper, a spokesman for Credit Suisse in Hong Kong, couldn’t immediately be reached for comment.
Citigroup is ranked first in arranging share sales in India this year, according to Bloomberg data. Credit Suisse is ranked 14th in a market where companies have raised 689 billion rupees year-to-date, the data show.
The automaker may sell shares, convertible bonds and other securities in India or overseas, Tata Motors said on Aug. 10. The funds may be raised at one time or in separate tranches, it has said. Investors also approved a proposal to raise borrowing limits for the company.
Tata Motors posted a net income of 19.9 billion rupees in the quarter ended in June, compared with a loss of 3.3 billion rupees a year ago. The company is working with Ford Motor Co. to increase supplies of engines for Jaguar Land Rover after demand jumped more than expected.
The maker of the Nano, the world’s cheapest car, has been selling securities to pare debt taken to fund the $2.5 billion acquisition of Jaguar Land Rover in 2008 from Ford. In October, it raised $750 million by selling global depository receipts and convertible bonds. Citigroup, one of Tata Motors’ advisers on the Jaguar Land Rover acquisition in March 2008, has since helped manage all its share sales.
Tata Motors had total debt of 199.8 billion rupees as of June, Chief Financial Officer C. Ramakrishnan said last week.