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Tata Steel Raises Rs 508Cr From Anchor Investors

19 January, 2011

Tata Steel has raised 5.08 billion rupees ($111.8 million) from anchor investors at the upper end of an indicated price range ahead of a public share offering, reflecting investor optimism in the company’s prospects in India’s fast-expanding economy.

Major investors include the Abu Dhabi Investment Authority, Government of Singapore, and investment units of Fidelity, Morgan Stanley, Credit Suisse, Macquarie and ICICI Prudential, exchange data showed.

The world’s seventh-largest steelmaker issued 8.325 million shares, or nearly 15 percent of the total offer, at 610 rupees each to 33 anchor investors, according to the data issued late on Tuesday.

Tata Steel is in the market to raise a maximum of 34.77 billion rupees ($770 million) by issuing 57 million shares, or 5.9 percent of equity, in the follow-on public offer at 594 to 610 rupees each.

The public offer, comprising of 48.675 million shares, opens on Wednesday.

The proceeds will be used to fund a 3-million-tonne capacity expansion at its Jamshedpur plant in eastern India, repay debt worth 10.9 billion rupees and invest in other projects.

Indian companies raised $24.9 billion from equity issues in 2010, up 22 percent from the previous year, ThomsonReuters data showed. The fundraising has been bolstered by a firm stock market and surge in foreign inflows as overseas investors seek broader exposure to an economy growing at 8.5 percent.

RBS, HSBC, SBI Capital, Citigroup, Deutsche Bank, Standard Chartered and Kotak Mahindra are the managers to the Tata Steel offering.

At 0500 GMT, shares in Tata Steel, valued at $12.6 billion, were trading at 639 rupees, up 1 percent in a flat Mumbai market. The stock had risen about 10 percent in 2010, underperforming a 17.4 percent rise in the main index.


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Tata Steel Raises Rs 508Cr From Anchor Investors

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