Sign in Subscribe
Mining industry

Indian Companies Raise $925 Million through Global Depository Receipt Sales

Strategic Insights

— 2 min read

Indian companies Tata Steel and Suzlon Energy are actively seeking to raise capital through global depository receipt (GDR) sales, following in the footsteps of India's largest copper producer Sterlite Industries, which recently collected $1.5 billion from a similar sale in the US. The sales are aimed at repaying expensive debt and funding expansion plans, driven by improved economic indicators and a strong rally on local bourses.

Key Takeaways:

  • Tata Steel, the world's sixth-largest steelmaker, is issuing GDRs worth $400 million, with an option to collect $350 million more, depending on investor response.
  • Suzlon, the world's fifth-largest wind turbine maker, is offering GDRs worth $100 million, with an option to collect $75 million more.
  • Tata Steel will use the proceeds to part finance its growth plan, while Suzlon plans to use the funds for its business expansion.
  • The success of the Sterlite issue, which was sold out in six hours, has prompted other Indian companies to consider following suit.
  • Many other Indian firms may follow the lead of Tata Steel and Suzlon in seeking capital through GDR sales.
  • The Sterlite issue was the first USD-denominated GDR issue by an Indian company in two years, and raised $1.5 billion for the company's power generation plans and other capital expenditure.
  • The sales of GDRs by Tata Steel and Suzlon began on Monday and are expected to be completed by Tuesday.

Statistics:

  • $925 million: the total amount expected to be raised by Tata Steel and Suzlon through GDR sales
  • $400 million: the initial amount to be raised by Tata Steel through GDR sales
  • $350 million: the optional amount that Tata Steel may raise through GDR sales, depending on investor response
  • $100 million: the initial amount to be raised by Suzlon through GDR sales
  • $75 million: the optional amount that Suzlon may raise through GDR sales, depending on investor response
  • $1.5 billion: the amount raised by Sterlite Industries through its GDR sale in the US

Sources:

  • "Mumbai: Tata Steel and Suzlon Energy aim to raise up to $925 million (about Rs 4,440 crore at current exchange rates) by selling shares to international investors..." ([ Business Standard ](https://www.business-standard.com/article/markets/mumbai-tata-steel-and-suzlon-energy-aim-to-raise-up-to-925-million-through-gdr-sale-109072700680_1.html))
  • "Tata Steel, Suzlon plan $925 m GDR sale" ([ The Financial Express ](https://www.financialexpress.com/industry/tata-steel-suzlon-plan-925-m-gdr-sale/499982/))
  • "Sterlite Industries collects $1.5 billion from sale of shares in the US" ([ Business Standard ](https://www.business-standard.com/article/companies/sterlite-industries-collects-1-5-billion-from-sale-of-shares-in-the-us-109071600191_1.html))
  • "India's largest copper producer Sterlite Industries raised $1.5 billion..." ([ The Economic Times ](https://economictimes.indiatimes.com/news/company/corporate-trends/indias-largest-copper-producer-sterlite-industries-raised-1-5-billion/articleshow/62082638.cms))

Read more