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Tata Steel raised $500 million (approximately Rs 2,415 crore) through the GDR issue

Tata Steel will issue 65.4 million GDRs at $7.64 apiece, aggregating $500 million or Rs 372.2 a share. To be listed on the Professional Securities Market of the London Stock Exchange, this will be the largest ever Indian GDR offering on the LSE.

A Tata Steel press release says that the GDR offering had attracted demand from good quality investors, which enabled the company to increase the size from $ 400 million to $500 million.

The press release further says “Though the company has adequate liquidity with no material repayments in the next 12 months, the equity raising exercise will help in capitalising the balance sheet and enable deployment in highly attractive projects – like the ongoing expansion of Jamshedpur in India and overseas mining projects'.

Each GDR represents one ordinary share of Tata Steel. The GDR price represents a discount of 10.6 per cent vis-À-vis Tata Steel’s closing price on the Bombay Stock Exchange.

According to a research report from Standard Chartered , the GDR issue will lead to an equity dilution of 7.4 per cent for the company.
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