InvestorQ : Why is Tata Power also embarking on a rights issue at this point of time?
Sam Eswaran made post

Why is Tata Power also embarking on a rights issue at this point of time?

Answer
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Aditi Sharma answered.
4 months ago


In order to shore up its capital base and also to use part of the funds to repay debt, Tata Power is looking to raise capital through a rights issue. This is part of Tata Power’s larger plan to defray its debt to reduce the financial risk in the balance sheet. In addition, Tata Power will also look to monetize part of its power assets through the INVIT route. While the size is not yet known, it would most likely be in excess of Rs.2000 crore. The company may want to wait out the post COVID unlocking and come out with the rights issue closer to August when the market situation will be a lot clearer. Tata Power has a massive debt burden of Rs.44,000 crore and plans to wind it down to Rs.25,000 crore. It may also look to hive off its interests in shipping and hydro power.