Wednesday, April 29, 2009

Tata Motors to Generate $500 to $750 million by Selling Bonds

Tata Motors Ltd. in India has decided to sell bonds in order to raise a fund between $500 million-$750 million rupees. This information was revealed by an unnamed source involved in the matter. Tata Motors India Ltd. is now in talks with State Bank of India to provide the investors with guarantee. This guarantee will assure the bond owners that if Tata Motors can not pay the due amount to the investors, then State Bank of India will pay it for Tata Motors.

Tata Motors has recently launched its much-awaited passenger car Nano, which is widely known as People’s car, which costs 1 lakh. The automakers have received excellent response for Nano as 1 million potential buyers made their reservation for the car recently, even though the company is not able to manufacture 1 million cars this year. Naturally, Tata Motors now needs investment, and I guess, raising fund by selling bonds is part of that investment.

Related article:

The Wall Street Journal