TATA Motors plan to raise $983 Million in Japan
Tata Motors Ltd plans to list depositary receipts on the Tokyo Stock Exchange, and may raise more than 100 billion yen ($983 million) in Japan for acquisitions, said on Wednesday.
Tata, India's top vehicle maker, last week announced a deal to buy luxury brands Jaguar and Land Rover from Ford Motor Co for about $2.3 billion. Later this year it plans to start selling the Nano, the world's cheapest car at about $2,500.
A spokesman for Tata Motors, India's top vehicle maker, said he could not comment on the Nikkei report immediately. Tata Motors last month signed a deal for a $3 billion one-year bridge loan, which it has indicated it would use for Jaguar and Land Rover deal.
It also said it would raise additional long-term funds of up to 40 billion rupees ($1 billion). The Nikkei on Wednesday said Tata will list depositary receipts on Tokyo's largest bourse as early as this summer to finance acquisitions, becoming the first overseas firm to do so after restrictions were lifted last year. A depositary receipt is a security backed by a company's stock. It would allow Tata to access the Japanese capital markets without going through the hassle of a normal listing while allowing Japanese investors to invest in Tata in yen.
Analysts said New York-listed Tata Motors may be seeking to tap growing foreign investor appetite for Indian equity, as well as to diversify risk in a time of volatility.
"There is a lot of foreign investor interest in India and Indian companies are able to get a better price outside," said A.V. Rajwade, an independent currency expert. "Companies are avoiding New York now because Sarbannes-Oxley has made regulatory requirements strict. Whereas Japan is a major, liquid market and the low interest rates there makes the cost of funds lower." Shares in Tata Motors, which has a market worth of more than $6 billion, were up 1.5 percent at 636.90 rupees by 0551 GMT in a Mumbai market that gained 2.8 percent."
Source: Economictimes
Tata, India's top vehicle maker, last week announced a deal to buy luxury brands Jaguar and Land Rover from Ford Motor Co for about $2.3 billion. Later this year it plans to start selling the Nano, the world's cheapest car at about $2,500.
A spokesman for Tata Motors, India's top vehicle maker, said he could not comment on the Nikkei report immediately. Tata Motors last month signed a deal for a $3 billion one-year bridge loan, which it has indicated it would use for Jaguar and Land Rover deal.
It also said it would raise additional long-term funds of up to 40 billion rupees ($1 billion). The Nikkei on Wednesday said Tata will list depositary receipts on Tokyo's largest bourse as early as this summer to finance acquisitions, becoming the first overseas firm to do so after restrictions were lifted last year. A depositary receipt is a security backed by a company's stock. It would allow Tata to access the Japanese capital markets without going through the hassle of a normal listing while allowing Japanese investors to invest in Tata in yen.
Analysts said New York-listed Tata Motors may be seeking to tap growing foreign investor appetite for Indian equity, as well as to diversify risk in a time of volatility.
"There is a lot of foreign investor interest in India and Indian companies are able to get a better price outside," said A.V. Rajwade, an independent currency expert. "Companies are avoiding New York now because Sarbannes-Oxley has made regulatory requirements strict. Whereas Japan is a major, liquid market and the low interest rates there makes the cost of funds lower." Shares in Tata Motors, which has a market worth of more than $6 billion, were up 1.5 percent at 636.90 rupees by 0551 GMT in a Mumbai market that gained 2.8 percent."
Source: Economictimes
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