Tata Steel FPO gets strong response

The follow-on public offer of Tata Steel garnered a smart response from the investors, with the issue getting over-subscribed 5.97 times on the final day.

As per the data available on the National Stock Exchange website till 1700 hrs on Friday, the Tata Steel FPO received bids worth 29.06 crore shares against 4.8 crore equities on offer, thereby, generating demand worth a whopping Rs 17,726.6 crore.

The company had fixed the price band at Rs 594-610 a share for its FPO offer that opened for subscription on January 19. The offer closed today.

"Strong fundamentals of the company and the lucrative pricing of the offer saw the FPO generating great demand from the investors," Bonanza Portfolio Vice-President Avinash Gupta said.

Kotak Investment Banking's Associate Director Suneet Weling said the success of the FPO is a testimony to Tata Steel and its management and demonstrates the tremendous institutional and retail investor support for the Tata Group.

In the qualified institutional investors category, the offer was subscribed 0.67 times, while it got 0.20 times subscribed in the retail individual investors category.

With the FPO of 5.7 crore shares, which includes 83.25 lakh anchor investor shares, the company will garner Rs 3,477 crore at the higher end of the price band, while at the lower end of price band, it will raise Rs 3,385 crore.

Tata Steel intends to use the FPO proceeds to fund its ongoing expansion project in Jamshedpur as well as for repaying its debt.

Kotak Mahindra Capital Company Limited, Citigroup Global Markets India Private Limited, Deutsche Equities (India) Pvt Ltd, HSBC Securities And Capital Markets (India) Pvt Ltd, RBS Equities (India) Limited, SBI Capital Markets Ltd, Standard Chartered Securities (India) Ltd are the book running lead managers to the offer.

In November, the Tata Steel board had approved a proposal to raise up to Rs 7,000 crore ($1.5 billion) through various instruments. Subsequently, on December 24, the company secured shareholders' nod to raise a maximum of Rs 5,000 crore.