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Tata Steel FPO subscribed 8% till noon on first day

This article was posted on Jan 19, 2011 and is filed under Market News

Tata Steel today said it has raised Rs 507.82 crore through allotment of about 83 lakh shares to a clutch of anchor investors at the upper end of price band of its public offer, which is open for subscription.

“Committee of the board of directors of the company by a resolution dated January 18, 2011, in consultation with the book running lead managers, has finalised allocation of 8,325,000 equity shares, in aggregate, to anchor investors at a price of Rs 610 per equity share,” Tata Steel said in a filing to the Bombay Stock Exchange.

According to the filing, the share allotment will be done to 33 anchor investors at Rs 610 per share, the top end of the price band.

The follow-on offer of 4.8 crore shares, priced at Rs 594-610 per share, opened for subscription today and closes on Friday. Tata Steel would raise about Rs 3,385.80 crore to Rs 3,477 crore at the lower and upper band of the price of FPO.

Till 1300 hrs, the issue was subscribed about 8 per cent of the shares on offer.

The names include several foreign institutional investors like Nomura, Macquarie Bank, Credit Suisee (Singapore), Government of Singapore, Morgan Stanley, Barclays Capital and Abu Dhabi Investment Authority among others.

The shares will also be alloted to a clutch of domestic anchor investors, including Bajaj Allianz, MetLife India Insurance, Reliance Life Insurance, HDFC and ICICI Prudential among others, the filing said.

It further said that anchor investors would be required to bring in the additional amount, if the issue price is fixed at a higher level.

From the FPO proceeds, Tata Steel plans to use Rs 1,875 crore to part finance over Rs 16,000 crore expansion at Jamshedpur, while Rs 1,090 crore will be used to pay redemption amounts on some maturing non-convertible debentures due in May 2011.

Rest of money will be used for general corporate purposes, including investments in a project of Australian miner Riversdale, Tata Steel had said earlier.

Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, Deutsche Equities (India) Private Limited, Hsbc Securities And Capital Markets (India) Private Limited, Rbs Equities (India) Limited, Sbi Capital Markets Limited, Standard Chartered Securities (India) Limited are the book running lead managers to the offer.

The offer would close on January 21.

The shares of the company were quoted at 640.30 apiece on the Bombay Stock Exchange at 1400 hours, up 1.24 per cent from the previous close.

source: Business Standard

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