On the back of a surging market and foreign appetite for Indian offerings, Tata Steel and Suzlon Energy Ltd on Monday launched global depository share offers to raise a combined $575 million, sources said.
The two offerings follow last week’s $1.5 billion sale of American Depository Shares by Sterlite Industries in the largest US share sale from India in two years.
Tata Steel, which is the world’s sixth-largest steel maker, will sell GDRs worth $400 million, sources said. Suzlon, the world’s number five wind turbine maker, was offering $175 million in GDRs, said sources. Citigroup and JPMorgan were arranging the deal for Tata Steel, and Deutsche Bank was the arranger for Suzlon.
Officials at Tata Steel and Suzlon Energy could not immediately be reached for comment.
The deals come amid a flurry of capital-raising by Indian firms looking to retire debt, fund expansion and acquisitions in Asia’s third-largest economy. Before Monday’s deals, Indian companies had raised about $6.5 billion in equity issuance this year, compared with $5.9 billion over the same period a year ago, according to Thomson Reuters data. The sales have been powered powered by a 89% rally in the benchmark from 2009 lows in mid-March and $8.5 billion net inflows by foreign funds.
More equity issuance is in the pipeline from India, with Adani Power set to launch a $600 million initial public offer, the first major issue in 18 months, on July 28, and NHPC expected to launch its IPO on August 7.
Tata Steel, which bought Anglo-Dutch steel maker Corus in 2007, would most likely use the funds to meet expansion in India and also inject cash into its UK unit, sources said. As part of a revised debt covenants package with lenders, Tata Steel has said it would inject 425 million pounds ($700 million) into Tata Steel UK in a phased manner. Sources had said earlier this month that Tata Steel was looking to raise as much as $600 million through a GDR sale.