Kolkata, May 23: The board of directors of Tata iron and steel company ltd, scheduled to meet on June 7, is likely to recommend `attractive and handsome' bonus shares, according to analysts and senior brokers. "To meet its future expansion programme and to become world's leading steel producer with installed capacity of around 15 million tonne, it will have to increase its share capital without which borrowing will become difficult," said senior brokers here.
Under these circumstances it was expected that the company will go for recommending attractive bonus," the analysts said.
To fund its plans. Tata may have to go for borrowing, both domestic and international. Going for an attractive bonus issue will not only reward investors, but increase its total paid up capital.

The argument forwarded was that making huge investment would be easier, if the capital base was large enough from only Rs 366 crore at present. This would facilitate easy borrowings with comfortable ratio of debt and equity. The company was implementing plans to expand capacity at the Jamshedpur plant by one million tonne at a cost of Rs 2,000 crore. Tata steel managing director B Muthuraman had said earlier this week that it will be ready by September 2005 with full benefits visible in 2006-07 and by 2008 it will witness further capacity addition by 2.4 m tonne.
Bureau Report