Tata Motors likely to sell 15% stake in financial arm

Tata Motors is likely to sell a 10-15% equity stake in Tata Motors Finance, the group's auto financing subsidiary, as part of its fund raising efforts to reduce its debt, reported The Economic Times.

According to the news source, the potential sale of stake in Tata Motors Finance could fetch the company around INR2 billion which would value the subsidiary at INR13-20 billion. Tata Motors's current debt reportedly stands at INR240 billion.

Tata Capital, the group's finance arm, is believed to be one of the potential buyers of the stake.

The Economic Times quoted Tata Motors's spokesperson as saying: "Tata Motors is committed to deleverage the company through divestments and capital raising at an appropriate time, but specifics will be announced as and when we finalize (deals) on a case-to-case basis."

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Related terms: debt, equity, finance