Tata Nets $500 Million in London Listing

Tata Steel, the world's sixth largest steel maker, raised $500m by listing global depositary receipts on the London Stock Exchange yesterday, in the largest such listing by an Indian firm.

The offering, which is also the biggest share issue for London bourse's primary market this year, has lifted the number of Indian firms on the exchange to 51, including four Indian-focused companies on the main board and 24 GDR listings, and 22 quoted on the LSE's junior Alternative Investment Market.

Tata said it increased the size of the offer from $400m due to demand from good-quality investors. It is expected to use the proceeds to expand in India as well as Europe.

At $500m, Tata Steel's listing exceeds the total raised through all new issues in the first six months of the year in London. It was, however, less than the $600m the company had been expected to tap the market for.

Tata Steel, which bought the Anglo-Dutch steel maker Corus in 2007, said the equity raising will enable deployment in projects such as the expansion of Jamshedpur in India and overseas mining projects.

The GDRs will be listed on the LSE's professional securities market, following RusHydro's GDR listing on 6 July. Russia's RusHydro listed its GDRs without raising new money, but said it was looking to raise $3bn to $5bn in a full listing in the future. Tata Steel's GDR offer also surpasses Max Property's £220m initial public offering to become this year's biggest LSE listing.

The biggest Indian IPO in London, however, remains Vedanta Resources, which raised $1bn in 2003.

Tata Steel's Mumbai-listed shares rebounded after initially falling on concern about equity dilution. The company is issuing 65.4 million GDRs at $7.644 each, each representing one common share. They closed up 5.3 per cent at 411.75 rupees, giving the company a market value of about $6bn.