The design of Tata Motors’ Rs 1 lakh car is now over and the company is now testing its prototypes in its plants, Chairman of Tata Group, Ratan Tata said.

In a letter to company shareholders, Tata said the car will be a rear-engine, 4-5 seat, 4-door car with about a 30 horsepower engine. The car will be launched in early 2008 and will be attractive to younger families. ‘‘The launch of this small car will create a new paradigm in low-cost personal transport. It will create a new market segment and reach the broader base of the pyramid,’’ Tata said.

The company is also planning to raise funds worth Rs 3,000 crore by way of shares to finance its future plans future plans. Tata Motors—which earned a revenue of Rs 24,000-crore last fiscal—is planning to spend Rs 10,000 crore in the next 3-4 years towards new product development, capital expenditure in capacity enhancement, plant renewal and modernisation. It is also looking at meaningful growth opportunities through mergers and acquisitions in connection with company products.

About the tie-up with Fiat, Tata said in the coming months in the coming years both companies will develop new models which could be bagged and sold by both companies in different geographies. ‘‘The discussions (with Fiat) also include the possible sharing of manufacturing facilities at the plants of both companies,’’ Tata said.

Tata Steel plans Rs 6,500 cr share sale

MUMBAI: Tata Steel, which is planning Tata group’s biggest ever investment of Rs 70,000 crore in three new steel mills, will be selling shares worth Rs 6,500 crore and increase the promoters stake to over 27 per cent. It is also planning to raise Rs 20,000 crore in debt. The company said it will be making a preferential allotment of shares to its promoter Tata Sons which will increase the latter’s stake to 27.48 per cent in the company. The other Tata group companies will reduce their stake from 6.75 per cent to 6.12 per cent while rest of the shareholders will see their stake falling from 73.21 per cent to 66.4 per cent.