Tata Motors (TTM)

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Tata Motors sinks on fundraising plan
Thursday May 29, 8:23 am ET
Tata Motors shares plunge on fundraising plan for Jaguar, Land Rover deal

NEW DELHI (AP) -- Shares of India's Tata Motors Ltd. fell more than 8 percent Thursday, a day after the company said it would raise $1.68 billion through new shares to finance its recent purchase of Jaguar and Land Rover.

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Shares fell to 582 rupees ($13.61) and analysts were watching for further declines amid sluggish demand for trucks, buses and cars and rising commodity costs.

Citigroup cut its 12-month price target on Tata Motors to 791 rupees from 914 rupees, Jamshed Dadabhoy, an analyst at Citigroup Global Markets India, said in a note.

Tata Motors, India's biggest automaker by sales, said Wednesday it planned to raise the money through rights issue of equity shares, leading to fears that the stock value would be diluted.

The rights issues will expand the company's equity capital by about 30 percent to 35 percent in the current fiscal year that began April 1, the company said.

In March Tata agreed to buy Land Rover and Jaguar for $2.3 billion from Ford Motor Co.

"The magnitude of this offering is unexpected and could adversely affect short to medium-term stock performance," said Dadabhoy.

http://biz.yahoo.com/ap/080529/india_tata_motors.html?.v=1