Tata Power's rights issue worth almost Rs2,000 crore will open on March 31 and the proceeds will be utilised for capital expenditure and repaying debt.
The company will offer 33.22 crore equity shares with a face value of Rs1 each for cash at Rs60 a share (including a premium of Rs59) for an aggregate amount of up to Rs1,993.38 crore to existing investors.
The issue will close on April 15, according to Tata Power's offer document filed with market regulator Sebi.
Every investor holding 50 shares will be eligible to buy seven shares of the company.
Tata Power will extend Rs639.51 crore from the funds raised to Coastal Gujarat Power ltd, the operator of the 4,000 MW Mundra ultra mega power project in Gujarat, for part repayment of borrowings, according to the offer document.
AboutRs 533 crore from the net proceeds will be used to partly repay certain borrowings of Tata Power.
The company's total long-term outstanding indebtedness from banks and financial institutions stood at Rs9,091.77 crore at the end of December 2013.
Tata Power has earmarked Rs 300 crore for generation, transmission and distribution of electricity in the Mumbai license area, while Rs498.35 crore would be used for general corporate purposes, it said.
JM Financial Institutional Securities, BNP Paribas, HSBC Securities & Capital Markets (India), Kotak Mahindra Capital Company and SBI Capital Markets are the lead managers to the issue. link Intime India is the registrar.