Author(s):Mayank Joshipura, Vasant Sivaraman, Sameer M. Nawani
Title – Tata Power Ltd: innovation in financing growth. Subject area – Corporate finance, strategic financial management, financial innovation and financial engineering. Study level/applicability – The case is suitable for graduate level management students. Case overview – In early April 2011, Mr Ramakrishnan, the CFO of Tata Power Ltd and members of his team were busy re-evaluating fundraising options for financing Tata Power's capital expenditure requirements, for refinancing of debt, for working capital related to current projects and for liquidity to support potential acquisition bids. The team had the task of evaluating different innovative funding options as the challenge was to strike a fine balance between maintaining the owners' equity without dilution of control and avoiding any adverse impact on credit rating that could increase the cost of capital; these constraints reduced flexibility for fund raising. Keeping in mind the global market scenario and estimating the investor appetite were factors critical to the structuring of a funding instrument. Expected learning outcomes – The case will help students to be comfortable in thinking about evaluating markets, financial instruments and weigh rating considerations and regulatory constraints for taking capital structure decisions. Supplementary materials – Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.