Mumbai:The follow-on public offering of Tata Steel Ltd saw a lukewarm response from retail investors on Wednesday. At the end of the first day of subscription, only 4% of the shares allotted for retail investors were subscribed, exchange data showed.
The portion reserved for qualified institutional bidders saw 40% subscription. Rich individuals and non-institutional bidders bought 7% of the shares reserved for them.
The issue closes on Friday.
Tata Steel is planning to raise a maximum of Rs3,477 crore by issuing 57 million shares, or 5.9% of equity, in the FPO at the price band of Rs594 to Rs610 each. Shares of Tata Steel rose 1.16% on Wednesday to close at Rs639.80
On Tuesday, the company raised Rs508 crore from anchor investors at the upper end of the price band.
The allotment to anchor investors comprises an issue of 8.325 million shares, or nearly 15% of the total offer, at Rs610 each to 33 anchor investors.
The proceeds will be used to fund a 3-million-tonne capacity expansion at its Jamshedpur plant in Jharkhand, repay debt worth Rs1,090 crore and invest in other projects.
RBS, HSBC, SBI Capital, Citigroup, Deutsche Bank, Standard Chartered and Kotak Mahindra are the managers to the Tata Steel offering.