Tata Steel Ltd, India’s largest steel maker, will issue new shares to raise Rs 3,700 crore to boost capacity and cut the cost of buying its European unit.
The company’s board of directors decided to issue 57 million ordinary shares, of which 1.5 million will be reserved for employees.
“The price band and the minimum bid lot for the issue... will be advertised at least one working day prior to the bid/issue opening date,” the company informed the Bombay Stock Exchange (BSE) on Tuesday.
Tata Steel’s shares closed at Rs 647.60 on Tuesday, down 0.48%, while BSE’s benchmark index Sensex lost 0.14% to close at 19,196.34 points.
The money from the sale will add to the $5.4 billion (Rs 24,462 crore) of loans Tata Steel took to replace debt used to buy Corus Group Plc in 2007 for $12.9 billion.
Meanwhile, the company forecast that group operating income may decline in the three months ended 31 December because of stagnant sales and high raw material prices.
Bloomberg contributed to this story.