Tata Power looks to raise ₹2,000 crore through rights issue
1 min read . Updated: 05 Jun 2020, 11:07 PM ISTTata Power has appointed investment bank Kotak Mahindra Capital to start work on the rights issue
Tata Power Co. Ltd, India’s largest private power generation company, has started work on a rights issue to raise at least ₹2,000 crore, as it looks to reduce debt and tap new opportunities.
“Tata Power has appointed investment bank Kotak Mahindra Capital to start work on the rights issue. They will be appointing another three to four banks soon," said a person aware of the company’s plans, on the condition of anonymity.
Tata Power could raise at least ₹2,000 crore from the rights issue, although the final size of the offer could be significantly larger, he added. “The rights issue will be launched next quarter."
In a recent filing with the stock exchanges, Tata Power said it wanted to alter its memorandum of association to increase the authorized share capital from the existing ₹579 crore (divided into 350 crore equity shares of ₹1 each and 2.29 crore cumulative redeemable preference shares of ₹100 each) to ₹779 crore by creating 200 crore additional equity shares of the same face value. The company said it was working on a long-term strategic plan to strengthen its balance sheet and to improve its overall return metrics. This includes divestment of certain investments, restructuring businesses and participating in emerging opportunities in the power sector. Tata Power is also working on an infrastructure investment trust (InvIT), which will be launched in the coming quarter, and hopes to move some of the assets from its 3 gigawatts (GW) renewable energy portfolio on the platform, besides ₹10,000-12,000 crore of debt.
The rights issue and the InvIT will help the company deleverage its balance sheet. As on 31 March, Tata Power had net debt of ₹43,578 crore. Email queries to Tata Power and Kotak Mahindra Capital did not elicit any response till presstime.
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