Tata Steel and Suzlon Energy announced on Tuesday, that the companies have raised $500 million (Rs 2,418 crore) and $201.91 million (Rs 971 crore), respectively, by issuing securities in the global markets. Tata Steel raised money by issuing ?global depository receipts? (GDRs) aiming at expansion of its Jamshedpur plant and overseas mining projects, while Suzlon raised $108.04 million through the issue of GDRs and the remaining $93.87 million through ?foreign currency convertible bonds? (FCCBs).
Tata Steel will issue 6.54 crore GDRs at a price of $7.644 a piece, aggregating $500 million. Each GDR would represent one ordinary share of Tata Steel and would be listed on the London Stock Exchange. Tata Steel, which became the world?s sixth biggest steelmaker after buying Corus for $13 billion two years ago, will use the funds to raise production in India to 10 million metric tons. “The equity raising exercise and the listing on the LSE marks a significant milestone in the company’s capital raising journey and demonstrates the investors’ interest in the company’s strategic direction,” Tata Steel MD B Muthuraman said.
Similarly, Tata Power has also launched a GDR issuance of around $250 million with an option to retain an higher amount, a company?s release to teh stock exchanges said.
Meanwhile, Moody?s Investors Service has said that Tata Steel Ltd’s (Tata Steel) proposed equity offering has no impact on the company’s ratings. This follows Tata Steel’s announcement of an equity offering in the form of GDR for $500 million.
Suzlon Energy has issued 1.46 crore GDRs priced at $7.40 per piece. Each GDR would entitle the holder to get it converted into four equity shares. The Tanti-family promoted firm has also raised $93.87 million through the issue of zero coupon convertible bonds. “The initial conversion price (of bonds) has been set at Rs 90.38 per share,” the company said. GDRs of the wind turbine maker firm would be listed on the Luxembourg Stock Exchange.