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ShareMumbai: Tata Steel, India's largest integrated private steelmaker, has decided to raise $500 million via global depository receipts (GDRs). A company official confirmed the news as a "fresh development" taken place less than 48 hours ago.
"This is possibly going to be a GDR issue. Citigroup and JP Morgan are the arrangers for the deal," the official said. "The plan will be made public very soon".
An email sent to the company on the issue remained unanswered.
The official said funds raised will be used for the 2.9 million tonne expansion plan currently underway at the Jamshedpur plant. Tata Steel needs another Rs 9,000 crore for the 2.9 mtpa expansion. Funds for this phase haven't been tied up till now.
The company's flagship plant earlier had a capacity of 5 mtpa, which was raised to 6.8 mtpa in October last year. Tata Steel said the Jamshedpur expansion is a "high priority" project and will be completed by December 2010.
B Muthuraman, managing director, had said during a press conference on June 25 that demand for steel in India and China is up 2-4% even as the rest of the world sees production cuts. "We will achieve sales volumes of 20-25% in the current year," he had said.
