Mumbai, May 28: Tata Sons, the key promoter of various Tata Group companies, is hiking its stake in Tata Steel through a preferential issue of shares and warrants worth around Rs 1,330 crore at the current market price of its shares.
As part of the proposal, the Tata Steel board on Thursday approved an issue of 1.5 crore equity shares to Tata Sons on preferential basis which would be made at a price to be determined as per the applicable SEBI regulations, it said. Besides, the board also approved issuing up to 1.20 crore warrants with a right exercisable by the warrant holder to subscribe for one ordinary share per warrant to Tata Sons on preferential basis, it added.
The preferential allotment would be made on such other terms and conditions as the board/committee may in its absolute discretion decide, it said. The approval is subject to final permission to be accorded by the shareholders at its next meeting, it said. Shares of the company closed at Rs 493, up 1.76 per cent from the previous close on the BSE on Thursday.
The promoters stake in Tata Steel had come down to 31.32 per cent in March 2010 from 33.95 in March 2009. On the other hand, FII holding in the company soared to nearly 20 per cent from 13.20 per cent last year. The preferential issue will help Tata Sons to bring its shareholding to the earlier level.
As per the SEBI guidelines, the equity shares will be priced not less than the average of the weekly high and low of the closing prices of the related equity shares quoted on the recognised stock exchange during the six months preceding the relevant date or the average of the weekly high and low of the closing prices of the related equity shares quoted on a recognised stock exchange during the two weeks preceding the relevant date.
—-Agencies