Mumbai: Tata Steel has raised Rs508 crore ($111.8 million) from anchor investors at the upper end of an indicated price range ahead of a public share offering, reflecting investor optimism in the company’s prospects in India’s fast-expanding economy.
Major investors include the Abu Dhabi Investment Authority, government of Singapore, and investment units of Fidelity, Morgan Stanley, Credit Suisse , Macquarie and ICICI Prudential, exchange data showed.
The world’s seventh-largest steelmaker issued 8.325 million shares, or nearly 15% of the total offer, at Rs 610 each to 33 anchor investors, according to the data issued late on Tuesday. Tata Steel is in the market to raise a maximum of Rs3,477 crore ($770 million) by issuing 57 million shares, or 5.9% of equity, in the follow-on public offer at Rs594 to Rs 610 each.
The public offer, comprising of 48.675 million shares, opens on Wednesday.
The proceeds will be used to fund a 3-million-tonne capacity expansion at its Jamshedpur plant in eastern India, repay debt worth Rs1,090 crore and invest in other projects.
Indian companies raised $24.9 billion from equity issues in 2010, up 22% from the previous year, ThomsonReuters data showed. The fundraising has been bolstered by a firm stock market and surge in foreign inflows as overseas investors seek broader exposure to an economy growing at 8.5%.
RBS, HSBC, SBI Capital, Citigroup, Deutsche Bank, Standard Chartered and Kotak Mahindra are the managers to the Tata Steel offering.
At 10.30 a.m., shares in Tata Steel, valued at $12.6 billion, were trading at Rs 639, up 1% in a flat Bombay Stock Exchange. The stock had risen about 10% in 2010, underperforming a 17.4% rise in the main index.