Tata Investment Corporation will raise a total of Rs723 crore through a rights issue of zero-coupon convertible bonds via issue of warrants.

The rights issue the company would raise Rs448 crore in 2008 and possible another Rs275 crore in 2011, the company said in a filing with the Bombay Stock Exchange.

The zero coupon bonds of a face value of Rs650 will have three parts.

The first two will automatically and compulsorily convert into one ordinary share of  Rs10 at a premium of Rs290 and Rs340 in October 2008 and 2009, respectively, which will raise a total of Rs448 crore.

The third part will consist of detachable warrant, which can be purchased by the holder, at his option, against a price of Rs400 for one ordinary share in April 2011. If these warrants are exercised the company would receive a sum of Rs275 crore.

Tata Investment Corporation together with Tata Sons is a promoter of the Tata Mutual Fund.

The board of directors of Tata Investment has also recommended the payment of a dividend of 150 per cent on the ordinary share capital amounting to Rs15 per share of the face value of Rs10 (previous year – 130 per cent + 20 per cent special dividend on completion of 70 years).

Tata Investment Corporation was promoted by Tata Sons in 1937 as The Investment Corporation of India Limited partly to assist in the promotion of new companies and projects, and partly to act as an investment company.

Tata Sons together with other Tata companies today hold over 60 per cent in Tata Investment Corporation.