Tata Power is preparing to raise additional capital through a rights issue and the fundraising plan would be in addition to a continuing process to establish an infrastructure investment trust, or InvIT, for its renewable energy assets, sources told Moneycontrol.
“They are in active discussions with advisors and want to tap the rights issue route to reduce their debt burden and strengthen the balance sheet for expansion purposes,” said a source, familiar with the ongoing discussions, on condition of anonymity.
Another said the company will launch a rights issue of substantial size because of the magnitude of debt. “It should definitely be upwards of Rs 2,000 crore and the final approved amount could be much higher,” the source added.
Tata Power MD and CEO Praveer Sinha recently said the company would try to reduce its debt to the levels of Rs 25,000 crore from Rs 44,000 crore by the end of this fiscal year. “It is an indicative target. We are looking at various means to do it. We have already started our divestment process,” he had said.
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