Comments
The Steel Ministry is upset at the four merchant bankers handling Tata Steel's follow-on offer because they are due to handle the SAIL offering also.
The Steel Minister, Mr Virbhadra Singh, termed the action of these banks as “unethical”.
The four merchant banks are SBI Capital, Kotak Mahindra, Deutsche Bank and HSBC.
“Yes, we are unhappy about it. Certainly, this is unethical. We engaged them first. Why did the Tatas choose to come at the same time with the same merchant bankers is for them to explain and it is for the banks to explain,” the Minister told reporters here.
Mr Singh added that the Steel Ministry is also contemplating taking action against the banks.
“If it entails changing the merchant bankers, there will be some delay in coming out with the SAIL FPO,” added Mr Singh.
The merchant bankers, though, said that this is a small issue and that there is no norm that bars them from handling two issues from the same sector.
Mr Uday Kotak, Executive Vice-Chairman and Managing Director at Kotak Mahindra Bank, said that there is “no conflict on SAIL to the best of our judgment and belief”.
A merchant banker with Kotak Mahindra, who did not wish to be quoted, said that even the contract does not state that they cannot handle two issues from the same sector.
“The Government has asked for some clarification and we have sent in our replies as well. It is a small issue that will be resolved easily,” the banker added.
Tata Steel's FPO is scheduled to hit the markets on January 19. The company expects to mop up anything between Rs 3,385 crore and Rs 3,477 crore. There are fears that investors might not invest after this issue, when the SAIL issue hits the market.
However, merchant bankers said that the new shares of Tata Steel will be listed on the bourses by February 4, giving ample time for investors to focus on the SAIL issue.
“The shares will be allotted and the money will be returned to the investors' accounts much before the SAIL issue opens,” said a merchant banker with Kotak Mahindra.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.