Mumbai: At least 20 institutional investors have placed bids worth around Rs4,553 crore ($1 billion) for shares in Tata Steel Ltd’s follow-on public offer (FPO) to raise anywhere between Rs3,385 crore and Rs3,475 crore by selling 57 million fresh shares, two bankers involved with the issue said.
The company had opened its book for a day on Tuesday for institutional investors, also known as anchor investors, to place bids to buy 8.32 million shares, or 14.6% of the stock worth reserved for this category. Investors such as HDFC Mutual Fund, Government of Singapore, ICICI Prudential Mutual Fund, Fidelity India, Prudential Partners of Singapore, Broad Peak (a Mauritius-based investment fund), Abu Dhabi Investment Authority, Bajaj Allianz Life Insurance Co., Metlife Insurance Co., Reliance Life Insurance Co., Blackstone Asset Management fund, DWS Investment and Goldman Sachs Asset Management fund are among investors who have bid to buy shares in the country’s largest steel maker, which wants to use the money to repay debt and expand steel capacity in India, according to the bankers cited above.
Mint could not independently verify that the institutions had placed the bids.
Another investment banker associated with the issue said, “Some of the foreign and domestic institutional investors refrained on Monday from placing larger bids as the chances of allotment were low, considering the high demand.”
“There is no way you can accommodate all as the chances are that for every nine shares they bid, only one share will be allocated,” the banker added.
The company has appointed merchant bankers such as Citigroup Global Markets IndKotak Mahindra Capital Co. Ltdia Pvt. Ltd, Deutsche Equities (India) Pvt. Ltd, HSBC Securities and Capital Markets (India) Pvt. Ltd, RBS Equities (India) Ltd, SBI Capital Markets Ltd and Standard Chartered Securities (India) Ltd, to manage the issue.