The proceeds from the issue will be utilised for capital expenditure and repaying debt.It had said it would extend Rs. 639.51 crore from the funds raised to Coastal Gujarat Power Ltd, the operator of the 4,000 MW Mundra ultra mega power project (UMPP) in Gujarat, for part repayment of borrowings, according to the offer document.About Rs. 533 crore from the net proceeds will be used to partly repay certain borrowings of Tata Power.
The company's total long-term outstanding debt from banks and financial institutions stood at Rs. 9,091.77 crore at the end of December 2013.
Tata Power has earmarked Rs. 300 crore for generation, transmission and distribution of electricity in the Mumbai licence area, while Rs.498.35 crore would be used for general corporate purposes.