Indian auto major Tata Motors is considering listing its prized European purchase Jaguar Land Rover (JLR) on the London Stock Exchange, atleast three people familiar with the development said on condition of anonymity.
JLR will most likely be listed in FY 12 and Tata Motors has initiated discussions with several investment banks to manage the proposed issue. One of the people quoted above said that atleast four banks including Citi, SBI Caps, JP Morgan and HSBC have been in active discussions with senior management of Tata Motors.
The banks are said to be presenting their valuation proposals and recommendations for listing timeline to Tata Motors.
Tata Motors had acquired the Jaguar Land Rover brands from Ford in 2008 for $2.3 billion. Tata Motors has been successful in turning around the European subsidiary and JLR has also indicated that it will hire over 2,000 people within the next two years to increase its headcount by over 11 per cent globally across different functions.
Analysts are keenly watching out for the development as a listing would ensure that Tata Motors will get the much needed cash for a capacity ramp-up as well as for debt repayment, which still stands at close to Rs 20000 crore.
Says an analyst with a foreign brokerage, who did not wish to be named “A JLR listing is a good idea. It will ensure fund raising for the company without dilution at the Tata Motors level. JLR has a capacity expansion plan and still has a pile of debt”.