Tata Steel falls 2% after board approves fund raising through rights issue

The stock was down 2% to Rs 693 on the BSE in otherwise range-bound market on equity dilution concerns after the company's board approved to raise up to Rs 12,800 crore through rights issue.

Tata Steel was down 2% to Rs 693 on the BSE in intra-day trade on equity dilution concerns as the company's board approved to raise up to Rs 12,800 crore through rights issue to finance organic and inorganic growth plans.

"The Board approved issuance of equity and equity linked instruments including ordinary shares of the company by way of a rights issue to existing shareholders on record date for an amount not exceeding Rs 12,800 crore," Tata Steel said in statement.

The company said the board also approved a proposal to expand the capacity of Kalinganagar plant by 5 million tonne per annum (MTPA) to 8 MTPA with a total investment of Rs 23,500 crore.

The board also reviewed the financial strategy of the company in the light of organic and inorganic growth strategy of the company and approved financial plan to raise capital for the plan, it added.

At 10:41 AM; the stock trading 1% lower at Rs 702 on the BSE as compared to unchanged in the S&P BSE Sensex at 33,834 points. A combined 3.83 million shares changed hands on the counter on the BSE and NSE. It hit high of Rs 718 in early morning trade.