MUMBAI: Tata Power Co Ltd has kickstarted work on a rights issue, which will see the company raise at least ₹2,000 crore or more, as the country's largest private power generation firm looks to deleverage its balance sheet and raise resources to 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 Rs2,000 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," he said.
In a recent filing with the stock exchanges, Tata Power said it wants to alter its Memorandum of Association to increase the authorised share capital from the existing ₹579 crore (divided into 350 crore equity shares of Re 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's 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 some businesses and participating in emerging opportunities in the power sector."
Tata Power is also working on an infrastructure investment trust (InvIT) in the coming quarter into which it hopes to move some of its 3GW of renewable energy portfolio along with ₹10,000-12,000 crore of debt.
The rights issue and the InvIT will help the company deleverage its balance sheet. As of 31 March, Tata Power had a net debt of ₹43,578 crore.
Spokespersons of Tata Power and Kotak Mahindra Capital could not be immediately reached.
