Tata Sons to inject Rs 400 crore in Tata Chemicals

Tata Chemicals, part of the Tata Group, will raise Rs 400 crore by issuing preferential shares to its parent Tata Sons.

PK Ghose, executive director and chief financial officer, Tata Chemicals, said, the company will issue 11.5 million shares to Tata Sons and raise Rs 400 crore.

“Tata Sons shareholding will rise to 30.4% from 28.15% after this,” he said.  The investment will be in this fiscal.

Ghose said the money raised will be used to fund expansion, mainly of the urea plant at Babrala in Uttar Pradesh.

Tata Chemicals currently produces 1.2 million tonnes of urea at Babrala and has plans to double the capacity through a Rs 3,800 crore plan.

R Mukundan, managing director, Tata Chemicals, said the techno-feasibility work for the expansion has begun.

He said expenditure this year would be Rs 300 crore.

The project will be completed in three years from kickoff.

Tata Chemicals also plans to set up 10 customised fertiliser units across the country. The first of these, with a capacity of 130,000 tonnes, will be commissioned in the second quarter of the current financial year. 

Meanwhile, Tata Chemicals reported a 6.48% dip in consolidated net profit for the year ended March 31, 2010, at Rs 606 crore, against Rs 648 crore last year.

Revenues for fiscal 2010 stood at Rs 9,544 crore as against Rs 12,772.5 crore for last fiscal.