Tata Steel to raise Rs1,500 cr through perpetual bonds

Tata Steel Ltd, India's biggest private steel producer, aims to raise as much as Rs1,500 crore ($332 million) in the nation's first sale of rupee perpetual bonds by a non-finance company, according to widespread reports.

JP Morgan Chase & Co and ICICI Bank will arrange the sale, said the reports. The Mumbai-based company will pay a coupon of 11.8 per cent on the bonds, which can't be called for redemption for the first 10 years.

However, all the parties concerned refused to confirm these reports officially. A Tata Steel spokesperson said that he wasn't aware of any bond sale plans.

Tata Steel group chief financial officer Koushik Chatterjee announced a Rs7,000 crore rupee fundraising plan in November. The bonds will add to the $5.6 billion of loans Tata Steel obtained on 29 September 2010 and the 34.8 billion rupees raised from a share sale in January to replace debt used to buy Corus Group Plc in 2007 for $12.9 billion. 

The deal will help the world's seventh largest steelmaker by sales raise long-term funds without taking on the repayment risks associated with debt, and avoiding the risk of tapping volatile stock markets.

The firm, a part of the salt-to-steel Tata group, is also in talks for a dollar-denominated perpetual bond, a report said.