The board of Tata Steel Ltd. today approved raising Rs 12,800 crore by way of a rights issue as India’s oldest steelmaker looks to strengthen its production capacity and pay debt.
The company will issue 15.53 crore fully-paid shares for Rs 8,000 crore and another 7.76 crore partly-paid shares for Rs 4,800 crore, it said in an exchange filing today. The issue price has been fixed at Rs 510 for each fully paid share, and Rs 615 for the partly paid share.
Tata Steel shareholders will get four fully paid up shares and for every 25 held and two party paid shares for every 25 shares held.
The steel makers had earlier stated that, it plans to raise funds via rights issue to build and buy mills, as well as pay debts. The board of Tata Steel also approved increasing the capacity of its Kalinganagar plant in Odisha by 5 million metric tons. The expansion will help the company boost the Indian steelmaker’s local capacity.
The issue opens on Feb. 14 and closes on Feb. 28. The record date for the rights issue has been set at Feb. 1.