MUMBAI (Reuters) – Tata Motors Ltd, India’s largest vehicle maker, raised $750 million to repay debt by selling global depositary receipts and convertible bonds, sending its shares down nearly 7 percent to their lowest close in a month.
Tata Motors said it would use the funds to cut debt incurred in its acquisition of Jaguar Land Rover last year from Ford Motor Co. It had consolidated debt of around 240 billion rupees ($5.2 billion) at the end of June.
MUMBAI (Reuters) – Tata Motors Ltd <TAMO.BO>, India’s largest commercial vehicle maker, said it raised $750 million by issuing global depositary receipts and convertible bonds to pay down debt taken on for its acquisition of the loss-making Jaguar and Land Rover brands last year.
Tata Motors <TTM.N>, had consolidated debt of around 240 billion rupees ($5.2 billion) at end-June, largely as a result of buying Jaguar Land Rover from Ford Motor Co <F.N> for $2.5 billion.
Honda’s premium hatchback Jazz has just added to the flurry of four-wheelers crowding the ramp in the compact car segment.Indian market leader Maruti has been in the forefront here, following up its launch of the A-Star in 2008 with the Ritz (see photo) this year.This week, Fiat launched the Grande Punto, another compact car.This segment already has cars such as the hugely popular Swift, Swift D’Zire (all from the Maruti stable), the i10, i20 and Getz from Hyundai, Chevrolet’s Spark, etc.There are more in the pipeline with Skoda Auto’s new Fabia expected later this year and Volkswagen’s Polo in early 2010.And there is room for more.Auto expert Hormazd Sorabjee thinks this segment is fairly elastic and has the scope to absorb the supply.”Of course there will be a lot of competition…they will eat into each other’s share, but it will help to expand the market. And the competition is good.”Around 75-80 percent of the cars sold in India are in the compact segment – where the price varies from about 350,000 rupees to about 700,000 rupees (the super-premium compact).Within this elastic price range, the category has the cars to suit all budgets.Maruti dominates the segment because of the number of brands it has.It would be difficult for other players to dethrone it mainly because the company has got a clear head start over the others and it has identified itself as more of an “Indian” company compared to them.Few people think about its Japanese parentage. It also has the advantage of having a wider service network than the other relatively recent entrants.What do you think? Which car can end Maruti’s domination over the compact car segment in India?