Tata Steel plans Rs 1,500-cr perpetual bond sale

Tata Steel Ltd, the country’s biggest producer, aims to raise as much as Rs 1,500 crore ($332 million) in the nation’s first sale of rupee perpetual bonds by a non-finance company, two people with direct knowledge of the matter said.

JPMorgan Chase & Co and ICICI Bank Ltd will arrange the sale, said one of the people, declining to be identified because the matter is confidential. The Mumbai-based company will pay a coupon of 11.8 per cent on the bonds, which can’t be called for redemption for the first 10 years, the person said.

Tata Steel Group Chief Financial Officer Koushik Chatterjee announced a Rs 7,000 crore fundraising plan in November. The bonds will add to the $5.6 billion of loans Tata Steel obtained on September and the Rs 3,480 crore raised from a share sale in January to replace debt used to buy Corus Group Plc in 2007 for $12.9 billion.

Chatterjee did not respond to an e-mail and a phone call made to his office. Kavita Sonawala, a spokeswoman for JPMorgan in Mumbai, declined to comment. Charudatta Deshpande, ICICI Bank’s spokesman in Mumbai, did not respond to an email.

Tata Steel shares gained as much as 2.4 per cent to Rs 607.5 and traded at Rs 606.8 as of 1.35 pm in Mumbai. The benchmark Sensitive Index of the Bombay Stock Exchange rose 1.5 per cent.