More cos join GDR queue,Tata Power launches 250-mn issue

The simmering down financial crisis has made global equity markets attractive for Indian companies. After Tata Steel and Suzlon Energy raised more than 700 million...

The simmering down financial crisis has made global equity markets attractive for Indian companies. After Tata Steel and Suzlon Energy raised more than 700 million by selling global depositary receipts and convertible bonds abroad on Monday,Tata Power on Tuesday launched its 250 million GDR issue.

More Indian companies are looking to raise overseas funds to push their expansion programs at a time when the countrys economy is showing signs of revival and the government is pushing for more money into infrastructure. The three offerings follow last weeks 1.5 billion sale of American Depositary Shares by Sterlite Industries in the largest US share sale from India in two years.

Tata Steel,the sixth-largest steelmaker by capacity in the world,raised 500 million after it decided to retain 100 million under the greenshoe option in addition to its initial offer for 400 million.

The company will be issuing 65,410,589 GDRs,with each GDR representing one ordinary share. Each GDR has been priced at 7.644 as per the relevant pricing guidelines for GDRs.

Commenting on the equity raising,B Muthuraman,managing director said,The equity raising exercise and the listing on the London Stock Exchange marks a significant milestone in the companys capital raising journey and demonstrates the investors interest in the companys strategic direction.

Suzlon mobilised a total amount of 201.91 million through GDRs and convertible bonds. It raised 108.04 million comprised of 14,600,000 GDRs. The price per GDR is fixed at 7.40 with each GDR representing four equity shares of the company. Further,fresh issue of 90.00 million zero coupon convertible bonds has been priced for a total amount of 93.87 million and the initial conversion price has been set at Rs 90.38 per share.

Koushik Chatterjee,group chief financial officer of Tata Steel,said,The GDR offering has attracted demand from very good quality investors which enabled the company to increase the offering size from 400 million to 500 million 8211; being one of the largest GDR offerings by any Indian Company on the London Stock Exchange. According to investment bankers,the lower cost of borrowing and raising funds abroad is a major reason for Indian companies taking the ADR/GDR route to mobilise funds.