Tata Steel jumps on refinancing buzz

Tata Steel jumped 4.18% to Rs 437.80 at 11:40 IST on BSE on reports that the company is planning to raise $1.24 billion overseas through the sale of bonds by one of its Singapore entities.

Meanwhile, the BSE Sensex was up 412.53 points, or 1.75%, to 23,963.53.

On BSE, so far 7.94 lakh shares were traded in the counter, compared with an average volume of 8.73 lakh shares in the past one quarter.

The stock hit a high of Rs 439.70 so far during the day, which is also a 52-week high for the counter. The stock hit a low of Rs 422.20 so far during the day. The stock hit a 52-week low of Rs 195.40 on 7 August 2013.

The stock had underperformed the market over the past one month till 9 May 2014, rising 0.04% compared with 1.29% rise in the Sensex. The scrip had also underperformed the market in past one quarter, rising 12.26% as against Sensex's 12.85% rise.

The large-cap company has an equity capital of Rs 971.21 crore. Face value per share is Rs 10.

According to the report, the fund raising plan is part of a mega $7 billion debt refinancing initiative for Tata Steel Europe, formerly known as Corus. This is among the largest such exercises by an Indian company and will also see it raise fresh loans to refinance existing term loans and revolving credit facilities, the report added.

Report further suggested that senior company officials have already held preliminary discussions with a large group of Indian and international lenders from Europe, the US and Asia and has even proposed a detailed financing structure to them.

As per the report, the process is expected to gather momentum after the company announces its fourth-quarter numbers on Wednesday, 14 May 2014.

On a consolidated basis, Tata Steel reported a net profit of Rs 503.24 crore in Q3 December 2013 as against net loss of Rs 763.06 crore in Q3 December 2012. Net sales rose 14.4% to Rs 36409.80 crore in Q3 December 2013 over Q3 December 2012.

Tata Steel is among the top-ten global steel companies with an annual crude steel capacity of over 29 million tonnes per annum (mtpa). It is the world's second-most geographically-diversified steel producer, with operations in 26 countries and a commercial presence in over 50 countries.

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