Tata Power falls 1%, to raise Rs 2000 cr via rights issue

"The board has approved raising funds upto Rs 2,000 crore by way of a rights issue of equity shares of face value of Rs 1 each subject to all applicable statutory and regulatory approvals," it said in a statement to the BSE.

February 28, 2014 / 14:04 IST

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Moneycontrol Bureau

Shares of Tata Power fell over 1 percent intraday on Friday after the board approved raising funds upto Rs 2,000 crore via rights issue. This week, the stock had been a favourite among investors after Central Electricity Regulatory Commission (CERC) allowed compensatory tariff of Rs.0.524 per unit for its Mundra plant.

“The board has approved raising funds upto Rs 2,000 crore by way of a rights issue of equity shares of face value of Rs 1 each subject to all applicable statutory and regulatory approvals,” it said in a statement to the BSE.

It also informed that terms and conditions of the rights issue including the rights entitlement ratio, the issue price, issue size, record date and timing will be decided subsequently by a duly constituted committee.

Meanwhile, Tata Power had said that the CERC ruling will help in reducing Mundra project's annual losses by Rs 1,100 crore. The 4,000 MW Mundra ultra mega power project, located in Gujarat, is estimated to be incurring a loss of Rs 1,500 crore annually mainly due to rise in price of Indonesian coal that is used to fire the plant.