India's Tata Steel board approves up to $2 billion rights issue

A bus is reflected in a Tata sign outside their offices in London, Britain March 30, 2016. REUTERS/Toby Melville

(Reuters) - India’s Tata Steel Ltd has approved a rights issue to raise up to 128 billion rupees ($2 billion) to fund capacity expansion at a plant in the eastern state of Odisha, and to cut debt.

The company's Kalinganagar plant will be expanded by 5 million tonnes per annum (tpa) to 8 million tpa, entailing a total investment of 235 billion rupees, the company said in a statement.

The expansion is expected to meet growing demands from the automotive and general engineering segments, it said.

The project, which is expected to be completed in 4 years, will be funded through a combination of equity and debt.

Reporting by Vishal Sridhar in Bengaluru; Editing by Biju Dwarakanath