on Oct 22, 2021)MUMBAI: Weighed down by losses and debt, Indian Hotels Company (the Taj chain) has agreed to issue new shares and convertible instruments to inject Rs 4,000 crore into the business, as it rises from the depths of the pandemic. It has increased the fund-raise programme from Rs 3,000 crore after a re-evaluation of its requirement.
In August, it had decided to raise up to Rs 3,000 crore through a rights offering. But, on Thursday, it modified its capital-increase programme and now will raise Rs 2,000 crore via a rights issue and another Rs 2,000 crore through a qualified institutional placement (QIP).
At Taj’s annual shareholder meet in June this year, its chairman N Chandrasekaran had said that capital infusion in some form in the company is important. It will not only help to navigate the immediate months but also prepare for the future. Taj said on Thursday that the equity issuances are to make the company “zero-debt” in the future and to finance growth plans. It has a debt of Rs 3,571 crore on its books.
Taj parent Tata Sons will be subscribing to a substantial chunk of the Rs 2,000-crore rights issue considering it holds 38% in the hospitality chain. In case of under-subscription, the rights issue will be backed by Tata Sons. On Thursday, IHCL reported a loss of Rs 131 crore for the second quarter of fiscal 2022.
