Tata Group Stock Right Issue at 34 per cent Discount: First-Ever Rights Issue by the Stock

The rights entitlement ratio is set at 1 rights equity share for every 26 fully paid-up equity shares held on the record date.

Tuesday marked a historic day with significant amendments to taxes related to Long-Term Capital Gains (LTCG), Short-Term Capital Gains (STCG), Securities Transaction Tax (STT), and the abolishment of indexation, announced by the finance minister. Among these major developments, a noteworthy announcement came from a Tata Group stock – Tata Consumer Products Ltd.

Tata Consumer Products Ltd. has announced its first-ever rights issue to raise Rs 3,000 crore. The rights issue price is set at Rs 818 per equity share, with the record date being July 27, 2024. The rights issue period will open on August 5, 2024, and close on August 19, 2024.

This is a historic move as it marks the first time Tata Consumer Products Ltd. has announced a rights issue. The rights entitlement ratio is set at 1 rights equity share for every 26 fully paid-up equity shares held on the record date.

For shareholders, the details are as follows:

Rights Equity Shares: Offered on a rights basis to eligible equity shareholders in the ratio of 1 rights equity share for every 26 fully paid-up equity shares held on the record date.

Fractional Entitlements: If any eligible equity shareholder holds less than 26 equity shares or not in multiples of 26, the fractional entitlement will be ignored in the computation of the rights entitlement.

Zero Rights Entitlement: Shareholders holding less than 26 equity shares will have zero rights entitlement in this issue. However, they are entitled to apply for additional rights equity shares and will be given preference in the allotment of one additional rights equity share if they apply for it.

Non-Negotiable Application Forms: These shareholders cannot renounce their rights in favor of third parties, and the application forms shall be non-negotiable.

Shares of Tata Consumer Products Ltd. closed at Rs 1,256.90 on the NSE. The rights issue has been announced at a price of Rs 818 per equity share, representing a significant discount of approximately 34 per cent to the closing price.

Disclaimer: The article is for informational purposes only and not investment advice.