Tata Steel strengthens on fund raising buzz

Tata Steel rose 1.28% to Rs 666.95 at 10:05 IST on BSE on reports it plans to raise around Rs 4000 crore via issue of non-fungible global depository receipts to part-finance its acquisition of Corus.

The scrip had touched a high of Rs 667 and a low of Rs 652.15 so far during the day. The stock had hit a 52-week high of Rs 969.80 on 29 October 2007 and a 52-week low of Rs 372.13 on 2 April 2007.

The world’s sixth largest steel maker has an equity capital of Rs 730.58 crore. Face value per share is Rs 10.

At the current price of Rs 666.95, the scrip trades at a PE multiple of 9.50, based on Q3 December 2007 annualised EPS of Rs 70.17.

According to reports, the company has started discussions with institutional investors on the prospect of launching the instrument. The company will take a call after receiving feedbacks from likely buyers. The non-fungible global depository receipts (GDRs) do not have voting rights and are not convertible into equity shares

The net profit of Tata Steel rose 0.5% to Rs 1068.58 crore on 11.3% rise in sales to Rs 4973.92 crore in Q3 December 2007 over Q3 December 2006.

Tata Steel is engaged in manufacture and distribution of steel, welded steel tubes, cold rolled strips, bearings and other related products and services.