Market News
2 min read | Updated on July 23, 2024, 20:17 IST
SUMMARY
Tata Consumer Products informed the exchanges on July 23 that it will issue over 3.66 crore ‘Rights Equity Shares’ for an amount aggregating to ₹2,997.77 crore. The company has fixed the rights issue price at ₹818 apiece, a 35% discount from the stock’s closing price of ₹1,258 apiece on the NSE on Tuesday.
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Tata Consumer Products raise ₹3,000 crore via rights issue, check record date
In a filing to the stock exchanges, the Tata Group company said that it will issue over 3.66 crore ‘Rights Equity Shares’ for an amount aggregating to ₹2,997.77 crore. The company has fixed the rights issue price at ₹818 apiece, which includes a premium of ₹817. The rights issue is being conducted at a discount of 35% against the stock’s closing price of ₹1,258 apiece on the NSE on Tuesday.
The consumer goods producer informed the bourses that the record date for the rights issue has been fixed as July 27. The rights issue is scheduled to open on August 5, and the closing date for the issue has been fixed on August 19.
Earlier in January, the company announced that its board had approved raising funds via a rights issue.
A rights issue is a method of raising funds by selling additional shares to existing shareholders.
As per the terms of the rights issue, the shares are being offered on a rights basis to eligible shareholders in the ratio of 1:26. Shareholders who own shares of Tata Consumer Products on the record date will be eligible to receive one right equity share for every 26 shares held by them.
The company added that if the holding of any eligible shareholder is less than 26 shares or not in the multiples of 26, the fractional entitlement of such shareholders will be ignored in the computation of the Rights Entitlement. However, such shareholders will be given preferential consideration for the allotment of one additional rights equity share each if they apply for it over and above their entitlement.
On the other hand, shareholders who have less than 26 shares will have ‘zero’ rights entitlement in the issue. Such shareholders are entitled to apply for additional rights equity shares and will be given preference in the allotment of one additional rights equity share. However, these shareholders will not be allowed to renounce the same in favour of third parties.
Shares of Tata Consumer Products Ltd closed 4.42% higher at ₹1,258 apiece on the NSE on July 23.
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