Tata Power on Thursday said its board has approved a proposal to raise Rs 2,600 crore through the issuance of preference shares to promoter Tata Sons. Tata Sons’ shareholding will increase from 35.27 per cent to 45.21 per cent after the preferential issue. Consequently, Tata Group’s shareholding will increase in the firm from 37.22 per cent to 46.86 per cent.

“The board approved the issuance of shares at a price of Rs 53 apiece for Rs 2,600 crore, subject to shareholder approvals,” Tata Power said in a communication to the bourses.

The issue price represents a 15 per cent premium to Wednesday’s closing price.

Shares of Tata Power on Thursday zoomed 8.37 per cent on the announcement. On the BSE, the scrip settled at Rs 49.85, marking a gain of Rs 3.85 over its previous finish.

At its meeting, the board also gave in-principle approval for setting up of InvIT (Infrastructure Investment Trust) for the company’s renewable business. The annual general meeting of shareholders will be held on July 30 wherein the company will seek shareholders’ approval for the preferential issue.

“This equity raise demonstrates the confidence reposed by Tata Group in the company’s capabilities,” said Praveer Sinha, CEO & MD of Tata Power.