Tata Motors Ltd. (500570.BY) Wednesday raised INR42 billion to repay part of the $3 billion financing taken for the acquisition of British luxury car brands, Jaguar and Land Rover last year.

India's biggest auto maker by sales raised the money via the issue of secured non-convertible local currency debentures in four phases.

Tata Motors, which acquired Jaguar and Land Rover from Ford Motor Co. (F) last year, took the $3 billion bridge loan last year. It has already repaid $1.11 billion to the banks from funds it raised via a rights issue and the sale of a stake in group company Tata Steel Ltd. (500470.BY) last year. The remaining $2 billion is due by the end of June.

The issue was subscribed through a book building process and the annual maturity yields were fixed at 6.75% for the 23-month phase, 8.40% for the 47-month phase, 8.45% for the 59-month phase and 10% for the 83-month phase, Mumbai-based Tata Motors said in a statement.

The debentures carry a coupon of 2% and will be redeemed at varying premia on maturity, the auto maker said.

"The issue was quite a success and well oversubscribed," said C. Ramakrishnan, Tata Motors' chief financial officer. "The issue structure effectively met the company's requirement of tenors, cost and servicing."

The State Bank of India (500112.BY), the nation's biggest bank by assets, had issued a guarantee of INR49 billion for the debentures, said Tata Motors, part of diversified conglomerate Tata Group. Citigroup Inc. (C), Tata Capital Ltd. and SBI Capital Markets Ltd. were mandated for the debenture issue

On Fund-Raising Drive

Tata Motors, maker of the Indica and Indigo cars, bought Jaguar and Land Rover as part of its strategy to expand its product range and presence in overseas markets.

But the global economic slowdown has hit sales of vehicles, and especially luxury cars, worldwide, as well as making borrowing more expensive. This led the company to employ various means to augment its liquidity.

Last month, the auto maker said it had raised more than INR20 billion from the Indian public from a fixed-deposit scheme that was introduced in December. The company has the option to raise a maximum of INR27 billion from that scheme.

It is also working on plans to sell stakes in six profitable unlisted units, according to local media reports.

It introduced a INR41.5 billion rights issue last October but weak response forced the company's founders, Tata Sons, to subscribe to more than INR30 billion of shares.

Tata Motors has, however, raised about INR25 billion earlier this month in fully paid advance orders from more than 203,000 customers in India for its Nano minicar, which it has billed as the world's cheapest car with the base model costing INR123,360 at showrooms in New Delhi.

-By Ameya Karve and Santanu Choudhury; Dow Jones Newswires; +91-22-6145-6121; santanu.choudhury@dowjones.com