Tata Motors Fixes Rights Issue at Rs 450/Share

India's largest commercial vehicle manufacturer Tata Motors fixed issue price for the rights issue at Rs 450 per share which includes premium of Rs 448 on face value of Rs 2 each.

Shareholders of Tata Motors will get an option to buy six shares at a discounted price of Rs 450 for 109 shares held in the company.

For the Tata Motors DVR holders price of rights issue is fixed at Rs 271.

Under a rights issue a company gives an option to its existing shareholder to buy more shares in the company at a discounted price.

The company plans to raise an amount of Rs 7500 crore by issuing up to 15 crore ordinary shares and 2.65 crore shares with differential voting right.

Proceeds from the rights issue would be used reduce debt and enhance capital expenditure of the company.

The board of directors of the company also announced buy back of secured non-convertible debentures issued by the company in May 2009. The debentures carry face value of Rs 1250 crore and were set to mature in March 2016.

The Tata Motors filing said: "The above terms would be subject to the approvals of SEBI, Reserve Bank of India and all other appropriate authorities as may be necessary..."