The Telegraph
Since 1st March, 1999
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Tata Motors in top gear, zips to NYSE

Mumbai, July 28: Tata Motors has reported a 123 per cent jump in first-quarter profit at Rs 223.36 crore and announced plans for a New York Stock Exchange (NYSE) listing.

Total revenues, including other income, went up 46 per cent to Rs 4,286.17 crore over April-June of last fiscal.

“The Tata Motors board today approved a proposal to list the company’s outstanding global depository receipts (GDRs) on the NYSE in the form of American depository receipts (ADRs). This will be done in the course of this financial year. The company is not issuing new shares or raising fresh capital as part of the American listing,” a statement issued by Tata Motors said.

Analysts say the NYSE listing plan is an effort to give its foreign currency convertible bond (FCCB) holders a more robust platform for trading in shares. They feel it will also give the automobile major more visibility and help in better price discovery on bourses.

“Tata Motors will be the first company in the automobile and engineering sector to be listed on the NYSE,” the release stated. The largest firm in the Tata group by sales raised $400 million through foreign bonds, which it intended to list on the Singapore Stock Exchange.

The markets gave the numbers a lukewarm response, pushing up Tata Motors shares by 20 paise only to Rs 413.90 against its overnight finish of Rs 413.70.

The company recorded an 85 per cent increase in pre-tax profit at Rs 303.09 crore, though its operating margins were under pressure at 12 per cent compared with 13.2 per cent in the comparable quarter of last year.

Tata Motors said the thrust on cost reduction and other initiatives to reduce the impact of input price increases would continue. It has, however, outperformed the industry with its focus on new product introductions, thereby gaining market shares in both commercial vehicle as well as passenger car segments.

Sales volumes swelled 41 per cent to 84,918 units in the quarter. Of this, 39,877 commercial vehicles were sold at home, showing a jump of 50 per cent. The market share improved to 59.6 per cent from 57.1 per cent.

Domestic sales of passenger vehicles grew 35 per cent to 40,781 amid an improvement in market share to 17.4 per cent from 15.6 per cent. The company exported 4260 vehicles, a rise of 17 per cent over the first quarter of last year.

It raised funds to refinance loans to pay for the acquisition of Daewoo’s heavy vehicles unit, to ramp up production capacity and to fund overseas buyouts in future. Borrowing costs fell from 6 per cent to 3.5 per cent.

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