Tata Sons may raise up to $1 billion

THE HOLDING COMPANY PLANS TO INFUSE THE FUNDS IN GROUP UNITS SUCH AS TATA MOTORS

MUMBAI: 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.

Tata Sons’ board discussed possible avenues for the fundraise 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.

Tata Motors has struggled with weak sales in the past few months, posting a loss of ₹9,894 crore in the March quarter. In

May, a report from brokerage firm CLSA said the company’s Indian business had no equity value left, pointing to rising net debt levels and Covid-19 disrupting its deleveraging plans.

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.