The world's fifth-largest steel producer, Tata Steel, former Tata Iron and Steel Co Ltd (TISCO) has secured loan amounting to Rs 2,000-crore from Life Insurance Corporation, India's largest financial institution. LIC holds 11.68 per cent stake in Tata Steel, making it largest shareholder in the company after Tata Group.

The amount will enable the giant to make further equity infusions in its wholly-owned indirect subsidiary based in UK - Tata Steel UK. The company plans to raise Rs 3,000 crore via non-convertible debentures (NCD), which will be issued to LIC at rate 10.5 per cent. The bonds have been AA(ind) rated by Fitch rating agency. The existing cash balances together with the amount secured via these bonds will be used for expanding the capital base of the company. The capital of Tata Steel UK will be used for debt clearings and to keep consolidated net debt levels of the company unchanged.

In July 2007, the company borrowed non-recourse debt of around Rs 27,525 crore borrowed on Corus' books for acquisition of the Anglo-Dutch steel company. The company plans prepayment of about Rs 1,500 crore of this non-recourse debt as a part of its efforts to secure its European operations in the face of volatile market conditions.