Tata Motors [Get Quote], which bought Jaguar and Land Rover, said it will reconsider its plan to raise as much as $600 million from overseas markets due to the global credit crisis. The decision also follows a 34 per cent drop in the company's second-quarter profit owing to foreign currency losses and slowing sales.

"We are rethinking the refinancing plans for the bridge loan," said C Ramakrishnan, CFO, Tata Motors. Tata Motors needs to raise funds by June to replace a $3 billion bridge loan taken to purchase the two UK-based units from Ford Motor.

The company will also reconsider a proposal to list on the Tokyo Stock Exchange, he said.

The ongoing financial crisis in the US, worst since the Great Depression in the 1930s, is forcing companies to cancel acquisitions, stake sales and equity offerings.

Tata Motors on October 20 closed a rights offer to raise more than Rs 4,100 crore, after underwriters invested Rs 300 crore. The money was raised to fund the purchase of the luxury auto units. The Tata Group company bought Land Rover and Jaguar from Ford in June for $2.3 billion in its biggest overseas acquisition. The purchase enables the Indian company to get access to new technology and overseas markets.

Tata Motors profit dropped to Rs 346.99 crore for the quarter ended September 2008 compared with Rs 526.84 crore a year earlier. Profits dropped after the auto-maker recorded a Rs 285.02 crore foreign exchange loss on currency borrowings, deposits and loans.

Tata Motors will also review capital expenditure relating to increasing production capacity due to a slowdown in domestic demand, Managing Director Ravi Kant said. The company will realign its production strategy to gear up for a relatively dull next two quarters. "Production will be moderated," added Kant.

Net sales rose 7 per cent to Rs 7,029 crore in the three months ended September from Rs 6,594 crore a year earlier as it gained from producing vehicles from excise-free locations of Uttarakhand. Still unit sales of the company, including commercial, passenger vehicles and exports, dropped 1 per cent. During the quarter, Tata Motors sold 135,000 units, as demand for vehicles slowed owing to higher interest rates and climbing fuel prices.

Due to a shrinking US market and reducing availability of finance in Europe, the company has decided to go aggressively in pursuit of markets including Russia and China for Jaguar and Land Rover. Meanwhile, the company is in the process of concluding arrangement of vehicle financing in the US market even as it has already signed an agreement with Fiat Credit, a Fiat group company for a similar financing deal.

Combined sales of Jaguar and Land Rover fell by 11 per cent during the July-September period to 61,421 units worldwide.

The company's stock rose 9.11 per cent on the Bombay Stock Exchange (BSE) today to close at Rs 171.80 as against its previous close of Rs 157.45.