Tata Steel Ltd.

Tata Steel proposes to raise Rs 1,069 crore by issuing equity shares and warrants on a preferential basis to its promoter Tata Sons. The company will issue 1.50 crore ordinary equity shares at Rs 594 a share aggregating to Rs 891 crores and 1.20 crore warrants which are convertible into equity shares at Rs 594 a share within eighteen months from the date of allotment.

According to SEBI ICDR (Issue of Capital and Disclosure Requirements) regulations, 2009, an amount equivalent to 25 per cent of the price (Rs 594 a share) amounting to Rs 148.50 a warrant, aggregating to Rs 178.20 crore, would be paid by Tata Sons on allotment of the warrants.

Post conversion of warrants and additional share allotment, Tata Sons' holding in Tata Steel will increase to 32.47 per cent from 31.32 per cent. Tata Steel plans to enhance production capacity at its Jamshedpur plant from 6.8 mtpa to 10 mtpa by March 2011, with an investment of Rs 15,000 crore.

As part of the expansion programme, the company will ramp up its production capacity of flat steel items – consumed mainly by automobile and consumer durables industries – to 5.83 mtpa from 3.04 mtpa. The expansion is part of the steel major's plans to take its annual capacity to 16 million tonnes by 2014 at an investment of around Rs 40,000 crore.