Tata Motors to get ₹6,500 cr from parent
MUMBAI: Tata Motors Ltd on Friday said its board has approved an equity infusion of ₹6,500 crore from its promoter Tata Sons Pvt. Ltd. Tata Motors will allot ordinary shares and warrants to the promoter in return, subject to shareholder approval.
The board also approved raising ₹3,500 crore via external commercial borrowing, which will be used to refinance its existing debt.
PB Balaji, group chief financial officer of Tata Motors, said its total debt stands at around ₹50,000 crore, of which ₹20,000 crore is in its stand-alone business. “The equity infusion from the promoters will help TML to largely reduce its absolute debt levels. The fundraise will help Tata Motors’ stand-alone busireported ness, where the balance sheet has debt issues. Jaguar Land Rover’s balance sheet, however, is strong, and is in no need of capital infusion currently,” said Balaji.
Meanwhile, Tata Motors reported a consolidated net loss of ₹217 crore in the September quarter on higher tax expenses and accumulated losses from joint ventures, primarily from the Cherry Jaguar Land Rover Automotive Co. Ltd, its joint venture unit in China. The company accumulated loss of ₹363 crore in Q2 as against a profit of ₹86 crore in the year-ago period. On a year-on-year basis, the company managed to narrow down its loss, which stood at ₹1,049 crore in Q2FY19 .
Tata Motors reported operating revenue of ₹65,432 crore in Q2 FY20, as against ₹71,981 crore in the year-ago period. The 9% y-o-y fall in revenue was on account of subdued performance across Jaguar Land Rover (JLR) and its domestic business.
At ₹53,066 crore, JLR accounted for about 81% of Tata Motors’ operational revenue in Q2. JLR had earlier reported retail sales of 128,953 units in Q2, down 0.7% y-o-y. The performance could have been worse, but for a recovery in China, its biggest market, where retail sales grew 24.3% y-o-y.