Country's largest steel maker Tata Steel has fixed price band of Rs 594-610 a share for its follow-on public offer (FPO) of 5.7 crore ordinary equity shares of Rs 10 each. The issue will open for subscription during January 19-21, 2011.
Its anchor investors’ book, a part of qualified institutional investors, will open on January 18, one day before issue opens for public. Bids can be made for minimum 10 equity shares and in multiples of 10 shares thereafter.
The issue comprises a net issue to the public of 5.55 crore shares and a reservation of 15 lakh shares for subscription by eligible employees.
Tata Steel has a steel production capacity of approximately 27.2 mtpa. According to WSA, the company was the seventh largest steel company in the world in terms of crude steel production volume in 2009. The company is also one of the most geographically diversified steel producers, with operations in 26 countries and a commercial presence in more than 50 countries.
The company aims to raise around Rs 3,385.8-3,477 crore through the issue. On Friday, a share closed at Rs 621.70.
Tata Steel intends to use issue proceeds for partly financing the company’s share of capital expenditure for expansion of existing works at Jamshedpur; and payment of redemption amounts on maturity of certain redeemable non-convertible debentures issued by the company on a private placement basis.
The company is looking at spending Rs 1,875 crore, which will be raising through issue, for Jamshedpur plant during FY11-13. About Rs 1,090 crore will be spend for payment of redemption amounts in FY12.
As on September 30, 2010, promoters hold 32.48% stake in company. Insurance companies and foreign institutional investors hold 22.4% & 15.87% stake, respectively.
For the period of six months ended on September 30, 2010, company reported net profit of Rs 3,644.52 crore on total income of Rs 14,439.33 crore.
Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Pvt Ltd, Deutsche Equities (India) Pvt Ltd, HSBC Securities and Capital Markets (India) Pvt Ltd, RBS Equities (India) Limited. SBI Capital Markets Limited and Standard Chartered Securities (India) Limited are book running lead managers to the issue. Link Intime India Pvt Ltd is the registrar.
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