Tata Steel raises $770 million through follow-on offer
22 Jan 2011
Tata Steel has raised $770 million through a follow-on public offer that saw the issue being subscribed nearly six times despite the company pricing the scrip at the top end of the indicated price range.
The FPO was subscribed 5.97 times until 5pm on Friday with bids received for 290.67 million shares as against 48.68 million shares on offer. Offers were in the price band of Rs594 to Rs610, data available with the National Stock Exchange (NSE) showed.
The anchor investor portion of the offer was covered by around 25 funds that included Abu Dhabi Investment Authority, Macquarie Bank, Credit Suisse (Singapore), Government of Singapore and entities of HDFC Bank and ICICI Bank.
Tata Steel, the world's No 7 steel maker, said it has finalised the issue price at Rs610 ($13.4) a share - the top end of the indicative range.
The company will use the proceeds to partly fund a 3-million-tonne capacity addition at its Jamshedpur plant and investments in some other plants as also to repay a part of its $10 billion debt in the acquisition of European steel maker Corus.
Tata Steel is expanding annual capacity of its Jamshedpur plant to 10 million tonnes, from the current 6.8 million tonnes.
Tata Steel had, earlier this week, raised Rs508 crore ($112 million) from 33 anchor investors that included Abu Dhabi Investment, Government of Singapore and investment arms of Fidelity, Morgan Stanley and Credit Suisse.
Tata Steel has production facilities in Singapore, Thailand, the UK, South Africa and the Netherlands and India, with a combined current capacity of 27.2 million tonnes of steel.
