Tata Steel may raise $600m via GDR issue
Close on the heels of the launch of its $750m syndicated loans, Tata Steel is believed to be mulling the option of raising $600m by issuing global depository receipts (GDRs).
By TNN |
MUMBAI: Close on the heels of the launch of its $750m syndicated loans, Tata Steel is believed to be mulling the option of raising $600m by issuing global depository receipts (GDRs). According to sources, the biggest private steel manufacturer in India has already invited investment banks to pitch for its proposed GDR issue.
Top officials of investment banks, including Kotak Investment Bank, agreed that preliminary talks with Tata Steel on the GDR issue have begun. Officials in Tata Steel’s finance department denied any such attempts, but the company spokesperson declined to comment on the development.
The latest move, according to market sources, is seen as another attempt by the steel major to raise resources to fund its expansion and acquisition plans.
As part of its long-term growth strategy, the company has announced investments of over Rs 1 lakh crore to increase its capacity to about 35m tonnes by ’15. Its three greenfield projects in Orissa, Chattisgarh and Jharkhand alone will see the company investing about Rs 65,000 crore to add at least 20m tonne of capacity.
The company has stated that it is looking out for further acquisitions in the overseas market. This follows its two acquisitions in two years - NatSteel of Singapore in 2004 for about Rs 1,300 crore and Millennium Steel of Thailand last year for almost Rs 600 crore.
Last week, Tata Steel mandated Standard Chartered Bank, ABN-AMRO Bank, Citigroup Global Markets Singapore, Calyon, Bank of Tokyo-Mitsubishi, First Commercial Bank, Maybank, Mizhuo Corporate Bank and Sumitomo Mitsui Banking Corporation as lead arrangers to raise the $600m loan.
Top officials of investment banks, including Kotak Investment Bank, agreed that preliminary talks with Tata Steel on the GDR issue have begun. Officials in Tata Steel’s finance department denied any such attempts, but the company spokesperson declined to comment on the development.
The latest move, according to market sources, is seen as another attempt by the steel major to raise resources to fund its expansion and acquisition plans.
As part of its long-term growth strategy, the company has announced investments of over Rs 1 lakh crore to increase its capacity to about 35m tonnes by ’15. Its three greenfield projects in Orissa, Chattisgarh and Jharkhand alone will see the company investing about Rs 65,000 crore to add at least 20m tonne of capacity.
The company has stated that it is looking out for further acquisitions in the overseas market. This follows its two acquisitions in two years - NatSteel of Singapore in 2004 for about Rs 1,300 crore and Millennium Steel of Thailand last year for almost Rs 600 crore.
Last week, Tata Steel mandated Standard Chartered Bank, ABN-AMRO Bank, Citigroup Global Markets Singapore, Calyon, Bank of Tokyo-Mitsubishi, First Commercial Bank, Maybank, Mizhuo Corporate Bank and Sumitomo Mitsui Banking Corporation as lead arrangers to raise the $600m loan.
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In 18 months, the company has raised $100m from International Finance Corporation, $300m as part of an IFC-led syndication and Japanese yen equivalent of $500m syndicated loan facility. Tata Steel’s shares closed down 2.06% at Rs 517 at the BSE on Tuesday.Start a SIP with as low as ₹500 with ET Money App!
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