Tata Sons, the holding firm of the diversified business conglomerate Tata Group, has raised around Rs 47.5 crore (approximately $7 million) through an issue of cumulative redeemable preference shares to Ratan Tata and other key current and former executives, according to a report by The Economic Times, citing sources close to the development.
The holding company has issued 4.75 lakh preference shares of Rs 1,000 each with an assured dividend of 7.5 per annum every year without any voting rights. The preference shares were offered to 11 investors on August 27, the report said.
Narotam Sekhsaria, chairman of cement maker ACC, topped the list with 2.5 lakh shares, entitling him to an annual dividend of Rs 1.8 crore, followed by Ratan Tata with 1 lakh shares, which will make him richer by Rs 75 lakh every year.
Apart from Ratan Tata and Sekhsaria, the others investors who have been offered preference shares include former Tata Sons directors Noshir Adi Soonawala and Arunkumar R Gandhi, Tata Sons director R Gopalakrishnan, former Tata Consultancy Services chief executive officer S Ramadorai, former Tata Motors managing director Ravi Kant and Tata Group human resources head NS Rajan.
“Such preference shares are routinely issued by the company...The current issue of Rs 47.5 crore (on August 27) had been offered to and subscribed by existing preference shareholders of Tata Sons...These preference shares carry a dividend at 7.5 per cent every year without any voting rights," the paper quoted a Tata Sons spokesperson as saying.
Tata Sons, which was founded in 1868 and is based in Mumbai, is a diversified conglomerate and is engaged in businesses like information technology and communications, engineering products and services, materials, services, energy, consumer products and chemicals.
About 66 per cent of Tata Sons is owned by two philanthropic trusts namely Sir Dorabji Tata Trust and Sir Ratan Tata Trust, which are created by the families of the sons of Jamsetji Tata, the founder. Ratan Tata is the chairman of these trusts.