Tata Steel today said it has raised $500 million (about Rs 2,418 crore) through issue of securities in the global markets which will be deployed for funding expansion of its Jamshedpur plant and overseas mining projects.
"The Global Depository Receipts (GDR) offering has attracted demand from very good quality investors who enabled the company to increase the offering size from $400 million to $500 million," Tata Steel Group Chief Financial Officer Koushik Chatterjee said.
He added the company has "adequate" liquidity and no material loan repayment scheduled in the next 12 months. "The equity raising exercise will help in capitalising the balance sheet and enable deployment in highly attractive projects like the ongoing expansion of Jamshedpur in India and overseas mining projects," Chatterjee added.
The company will issue 6,54,10,589 Global Depository Receipts (GDRs) at a price of $7.644 a piece, aggregating to $500 million the company said in a statement.
Each GDR would represent one ordinary share of Tata Steel and would be listed on the London Stock Exchange.
"The equity raising exercise and the listing on the LSE marks a significant milestone in the company's capital raising journey and demonstrates the investors' interest in the company's strategic direction," Tata Steel MD B Muthuraman said.
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Earlier in the day, Tata Steel in a regulatory filing to the stock exchanges said its board had approved the raising of long term capital by way of issuance of GDRs. Citigroup Global Markets, Goldman Sachs International, JP Morgan Securities and UBS are acting as joint lead managers and joint bookrunners for the said issue.
The world's leading steel maker's plans to tap the GDR route for fund raising comes after mining firm Sterlite Industries last week said it would raise about $1.5 billion through the issue of American Depository Shares.
Shares of Tata Steel which had plunged 3.61 per cent in the morning trade rebounded later in the day. It surged nearly 5 per cent in the late afternoon trade and was currently trading at Rs 408.20, up 4.37 per cent over previous close.