Tata Sons, the holding company for most Tata group companies, is increasing its stake in Tata Steel by way of a preferential issue.
In an intimation to the stock exchanges, Tata Steel has informed that the committee of board of directors has approved an issue of 15 million equity shares and up to 12 million warrants with a right exercisable by the warrant holder to subscribe for one ordinary share per warrant.
The proposed issue will be made at a price yet to be determined. The Tata Steel stock today closed at Rs 493 on the Bombay Stock Exchange, an increase of 1.7 per cent over the previous day’s close. Tata Sons’ holding in Tata Steel at the end of March stood at 29.13 per cent, according to filings with the stock exchanges.
In 2009-10, Tata Steel India raised $634 million via rupee term loans, $479 million via non-convertible debentures and $46 million via foreign currency loan. Further, financial closure of $2,079 million of the 2.9 million tonne brownfield project at Jamshedpur was completed.
The project is expected to be completed in the October-December quarter of 2011, taking the total capacity to 10 million tonnes in Jamshedpur.