Tata Power's Rs2,000-cr rights offer to open before end-March

Tata Power Company will soon come out with a rights issue of shares to raise nearly Rs2,000 crore.

The proposed offer of rights shares will open on or before 31 March 2014 and will remain open for a minimum period of 15 days thereafter, the company said in a filing with stock exchanges.

Tata Power is offering 332.2 million rights equity shares of Re1 face value each at Rs60 per share. The entitlement ratio will be 7:50 (7 rights equity shares for every 50 equity shares held by eligible shareholders on the record date).

The entire rights issue price of Rs60 will be payable on application, of which Rs1 will be the face value of each share and Rs59 the share premium.

The issue will remain open for a minimum period of 15 days and a maximum of 30 days provided that the committee for rights issue in consultation with the lead managers extend the period of the issue for such further period as may be deemed fit, Tata Power Company said.

It may be recalled that Tata Power had, on 28 February 2014, said its board approved raising funds up to Rs2,000 crore by way of a rights issue of equity shares, subject to all applicable statutory and regulatory approvals.

The Tata Power scrip slipped 0.63 per cent to Rs78.65 at 9:18 IST on the Bombay Stock Exchange (BSE) on equity dilution worries after the firm announced the details of the proposed rights issue. The share was trading at Rs78.90 at 10 am.

The large-cap company has an equity base of Rs237.31 crore of face value Re1 per share.

The company had reported a profit of Rs251 crore on an income of Rs2,008 crore in the third quarter ended December 2013.