Tata Motors to raise Rs2,000 crore through FD scheme

02 Dec 2008

Tata Motors Ltd has announced a fixed deposit scheme in a bid to raise around Rs2,000 crore funds from the public to beat the credit market slump.

The company announced the launch of the FD scheme through a newspaper advertisement on Monday.

Tata Motors will offer 10 per cent for a one year deposit with senior citizens getting half a per cent more. The company has approval to raise Rs1931.48 crore from the public via FDs.

The move comes at a time when the company is shifting production base of its Nano small car project and trying to raise cash to refinance the $3 billion debt related to the acquisition of Jaguar-Land Rover.

Tata Motors' consolidated cash and bank balances stood at Rs3833 crore at the end of FY 08, while it had generated a cash flow (net -profit plus depreciation) of Rs1057 crore in the first half of FY 09.

The company's net debt to equity was 0.495 in FY 08 and this is likely to rise to 1.08 by the end of FY 10, according to Citigroup.