Follow-on public issue to raise up to Rs3,700 crore for Jamshepur expansion hits market on Wednesday
Tata Steel has acquired nearly 75% of land required for its greenfield project at Kalinganagar in Orissa and it intends to start work soon, Hemant M Nerurkar, managing director, Tata Steel, told Moneylife.
"Right now, we have almost 75% of land in our possession for the greenfield project in Orissa and it is enough to start work on the first phase of the project. We will start construction work soon," Mr Nerurkar said.
Tata Steel has been struggling to set up a greenfield project in Orissa for the past few years. "Developments in our projects in Orissa had not gone up to our expectations. However, the brownfield project in Jamshedpur is going well," he pointed out.
The company has planned a follow-on public offer (FPO) to raise Rs3,500 crore to Rs3,700 crore, to enhance domestic production capacity at its Jamshedpur plant and repay debt. The rest of its will also be used for general corporate purposes. The FPO hits the market on 19th January.
The FPO comprises a net issue of 55,500,000 equity shares to the public and a reservation of 1,500,000 equity shares for subscription by eligible employees. The issue will close on 21st January. The price band has been fixed between Rs594 and Rs610 a share.
"We will use around Rs1,700 crore to Rs1,800 crore for expansion of existing works at the Jamshedpur steel plant, around Rs1,000 crore will be used to repay debt and the rest of it will be used for other investment purposes," said Koushik Chatterjee, chief financial officer. Tata Steel plans to add 3.2 million tonnes to its current production capacity of 6.8 million tonnes at the Jamshedpur plant by December 2012.
"The company could also invest some part of the proceeds for the Bengal coal project of Riversdale," Mr Chatterjee said. "After this offer (FPO), the promoter's share holding in the company will come down by around 2.4% to 30.8%."
The company has appointed seven banks to manage the issue-Kotak Mahindra Bank, Citi, Deutsche Bank AG, Royal Bank of Scotland Plc, SBI Capital Markets, Standard Chartered Bank Plc and HSBC Bank.
On the volatility in steel prices, Mr Nerurkar said, "Prices of steel will go up in line with rising prices of raw materials, mainly coking coal." He also said that prices of steel cannot be increased every time as it could distract demand.
Analysts feel that the company will not suffer a hit on account of rising coking coal prices in the international market as about 60% of its requirement is met from captive mines.
"We are not facing any kind of difficulties for securing raw materials supply. We have sufficient stock of coking coal and iron ore," Mr Nerurkar said.
New Delhi: Industry chamber, Confederation of Indian Industry (CII) today pitched for expeditious enactment of the Insurance bill to hike the FDI in private insurance companies to 49%, from the current 26%, to raise the penetration level, particularly in the rural markets, reports PTI.
Insurance penetration in rural and social sectors is marked by high risk and hence require more dynamic and efficient risk management systems, CII said in a statement.
"...Hence there is a strong need to raise FDI cap in Insurance sector from the current 26% to 49%," CII said in its comments on the Insurance Laws (Amendment) Bill, 2008.
The Insurance Bill, when enacted, would allow raising the FDI cap for the industry to 49%. However, it has been awaiting approval since 2008 as it was delayed by strong opposition from the Left parties.
The insurance sector already has joint ventures with several foreign companies like ERGO International AG, Prudential Plc, ING Group, Allianz and Aviva.
These companies would be able to increase their investments in their Indian joint ventures if the FDI limit is increased.
"Greater foreign investments would help in training and skills upgradation of the agents. Raising the FDI cap will enable expertise (skills) and know-how transfer that are generally not available under the current regime," CII said.
The industry chamber said currently there is a shortage of expertise in the Indian insurance industry (like actuarial, underwriting, claims management).
Further, CII has suggested that non-executive directors of a corporate agent be permitted to be the director of a life insurance company.
"This would help regularise many cases where the promoter companies of the insurance companies have their own corporate agency like banks and finance companies," it said.
Mumbai: The country's largest software firm Tata Consultancy Services (TCS) today posted 29.93% jump in consolidated net profit at Rs2,369.83 crore for the third quarter ended 31 December 2010, reports PTI.
The company has announced a 200% dividend. It has declared the third interim dividend of Rs2 per equity share of Re1 each.
TCS had recorded net profit of Rs1,823.90 crore in the October-December 2009 quarter, the company said in a filing to the Bombay Stock Exchange.
Income from operations rose to Rs9,663.35 crore during the Q3 of the current fiscal, up 26.34% from Rs7,648.53 crore in the year-ago period. It has added 35 new clients during the quarter.
"Our ongoing performance has been the result of the sustained effort from all operating teams to focus on growth with profitability," TCS CEO and MD N Chandrasekaran said.
The company said it added 20,219 people (gross) during the quarter, its highest addition yet, taking the total headcount to 1,86,914 at the end of the December quarter.