Who needs introduction for Tata Steel. A flagship company of Tata group with revenue of more than Rs 1 lakh crore !!!
Since company bought Corus from Europe, company’s debt has increased considerably. As of Mar-10 the total loan company had amounts to Rs 53,100 Cr. The interest portion is to the order of Rs 350 Cr. In the Sep-10 quarter.
From today the company is issuing additional public shares via FPO in the price range of Rs. 594 to Rs 610. Company is bringing 57 million shares and hoping to collect Rs 3477 Cr. With this funds company plans to expand its Jameshedpur plant as well as partly refund the high cost loans. Once the company pays some of the high price loans, its interest components will go down.
In the coming quarters analysts expect that company will do better. As of today it is available at price Rs 640/- in the market about 5% higher than the FPO price (at the higher end of the band). It hit 52 week high on Rs 740/- just 2 weeks ago. Addition of the new capital will not impact much on the earning per share and other ratios.
In the last few quarters company has turned around significantly. First half year’s EPS is Rs 40 while last entire year’s EPS is Rs 60.00. Company also pays good dividend. Last year it has paid Rs 8/- as dividend per share. This year it can pay better dividend as the profits have significantly.
In the long run Tata Steel will continue to give good returns. In the FPO it is available at 5% discount to market’s price. Its worth accumulating.
Here is a summary
- Issue Open: Jan 19, 2011 - Jan 21, 2011
- Issue Type: 100% Book Built Issue FPO
- Issue Size: 57,000,000 Equity Shares of Rs. 10
- Issue Size: Rs. 3,385.80 - 3,477.00 Crore
- Face Value: Rs. 10 Per Equity Share
- Issue Price: Rs. 594 - Rs. 610 Per Equity Share
- Market Lot: 10 Shares
- Minimum Order Quantity: 10 Shares
No comments:
Post a Comment