Tata Motors has a market cap of Rs 180,000 crore and this includes the DVR and the ordinary shares. So, Rs 7,500 crore is just 4 percent of their market cap so this fund-raising in a sense is not a larger amount.
Tata Motors is looking to raise funds of up to Rs 7,500 crore through a rights issue. This rights issue wont be just of ordinary shares but of the DVR shares as well. The move is aimed at meeting the company's growth plans and to reduce the debt on the balance sheet. Although, the company hasn’t given any details of what the quantum, the pricing and the timing of these rights issue could be a precursor to the listing of the DVR in the ADR market. Tata Motors has a market cap of Rs 180,000 crore and this includes the DVR and the ordinary shares. So, Rs 7,500 crore is just 4 percent of their market cap so this fund-raising in a sense is not a larger amount.
The reason the company could be doing this is to increase the liquidity of the DVR. Remember, BSE had put out a discussion paper a couple of months ago in December to incorporate the DVR in the Sensex.
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