Shares of Tata Motors Wednesday climbed on the Bombay Stock Exchange and hit a record high of Rs 1,055, on media reports that the auto major is planning to raise about USD 700 million funds through the issue of securities.
The scrip opened on a strong note and never looked back during the day. It finished the trade with a gain of 4.19 per cent at Rs 1,047.60 on the Bombay Stock Exchange. During the day, the stock had risen about 5 per cent to hit a record high of Rs 1,055.
In a similar fashion, the stock moved up 3.39 per cent to end at Rs 1,040.80 on the National Stock Exchange.
On the volume front, over 80 lakh shares of the auto major changed hands on the two bourses.
Analysts said the rise on Tata Motors counter was mainly on reports that India's largest truck and bus maker is looking to raise funds.
"There are reports that the company is looking to raise fund, which led the rally in the scrip," SMC Global Securities Vice-President Rajesh Jain said.
"The stock is doing well ever since the company reported a robust result for the June quarter," he added.
According to media reports, Tata Motors, the owner of the iconic British brand Jaguar and Land Rover (JLR) is planning to raise up to USD 700 million (about Rs 3,266 crore) through
the issue of differential voting rights (DVR) shares.
DVR shares are different from ordinary shares and usually the DVR shareholders are entitled for a higher dividend than ordinary shares.
Two years ago, Tata Motors had issued 6.41 crore shares to repay the loan taken for funding the acquisition of luxury brands Jaguar and Land Rover. The DVR shares were listed on the stock exchanges in November 2008.
Meanwhile, the DVR shares of Tata Motors today ended with a gain of nearly 6 per cent at Rs 758 on the NSE.
"There are numbers of positive factors, which are leading to a rise in shares of Tata Motors. It includes fund raising plan and robust first quarter performance," CNI Research
Chairman and Managing Director Kishore P Ostwal said.
Some other frontline auto stocks too attracted buying and ended in the green. Hero Honda rose 0.15 per cent and Maruti 0.03 per cent.