The Telegraph
Since 1st March, 1999
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Tata Steel plans listing leap

Mumbai, Feb. 17: Tata Steel is considering an overseas listing in New York or London in a move that coincides with its aim to raise business four fold by 2010.

Indications about the listing wafted in with reports that the company was planning a price hike. That proved to be a two-way booster for Tata Steel shares, which closed at Rs 411.85, up from Rs 406.50 on Wednesday.

If it does hit Wall Street or the City in London, the largest private sector steel maker in the country will join sibling Tata Motors, which was listed on NYSE last year.

The automobile major converted its global depository receipts (GDR) into American depository receipts (ADR) to facilitate the listing. Analysts and group officials had then said that shares traded on the Big Board would help the company in foreign acquisitions. Overseas shares are often used to pay for buyouts.

Tata Steel, analysts say, would benefit in much the same way if its stock is traded on top global bourses. This is more so because the steel major, whose foreign ambitions have long been throttled by curbs on Indian companies' overseas acquisitions, will have a relatively free run now.

In doing so, it can compete with world leaders like Lakhsmi Mittal of Mittal Steel and Posco of Korea, besides European giants like Arcelor and Thyssen. All of them have been aggressive in buying iron ore and coal mines on foreign shores to secure supply of key inputs.

Tata Steel already has global depository receipts listed on the Luxembourg exchange. It is possible that these are converted into their equivalent American units. There is another section of analysts which believes fresh equity will be issued, given that the firm requires fresh funds to finance ambitious expansion projects.

'As a global player, it's good to be listed in London or New York. That's something we are thinking about,' Tata Steel chief B. Muthuraman said in Singapore, where he was overseeing the completion of the NatSteel deal.

However, a senior official accompanying him said the board of the company has not yet considered the proposal to have the shares listed on the two key global bourses.

The steps towards a listing in US or UK come at a time when steel makers are riding the crest of a rising price wave, whipped up largely by China's voracious appetite.

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