Tata Investment Corpn to raise funds through bonds

Mumbai: Tata Investment Corporation plans to raise Rs 448 crore this year through a rights issue of zero coupon convertible bonds (with warrants). Its board approved the issue of the bonds of face value of Rs 650 each in the ratio of one for every five ordinary shares held.

On the present paid-up ordinary capital of Rs 34.46 crore, this issue would raise a sum of Rs. 448 crore, said a company statement to the exchanges.
Each zero coupon convertible bond will be in three parts: Part A of Rs 300 will be automatically and compulsorily turned into an ordinary share of Rs 10 at a premium of Rs 290 on October 2009. Part B would be converted in the same way but at a premium of Rs 340 on October 2010.

Part C will consist of a detachable warrant and will entitle the holder to optionally purchase one ordinary share of the company against payment of Rs 400 per share in April 2011. If these warrants are exercised, the company would receive a sum of Rs 275 crore (in addition to the Rs 448 crore).
Part A, B, and C would increase the company’s ordinary share capital by Rs 6.89 crore each over a period of time, facilitating the servicing of the increased capital, said the company statement.

TICL is a non-banking financial company registered with the Reserve Bank of India under the ‘Investment Company’ category. The company’s activities consist primarily of long-term investments in equity shares and other securities of companies in a wide range of industries. The major sources of income for the company consist of dividend income and profit on sale of investments.
Tata Sons, together with other Tata companies, hold over 60 per cent of stake in TICL. Around 11 per cent of the shareholding is publicly held, while the balance is held by individuals and Trusts.

TICL, together with Tata Sons, is a promoter of the Tata Mutual Fund. TICL is also the principal shareholder of Tata Securities — a company engaged in the distribution of mutual funds and other investment related securities.

Profit up:

The company reported a net profit of Rs 185.8 crore for 2007-08, against Rs 181 crore the previous year. The Board has recommended a dividend of Rs 15 per share of Rs 10. TICL’s stock gained 5.73 per cent on BSE, closing at Rs 579.55 on Friday.