The board of Tata Steel has sanctioned an increased borrowing limit for the company, raising the levels from the present Rs 40,000 crore to Rs 50,000 crore. It has also sought shareholder’s approval for the same.

The move comes soon after the company refinanced the Rs 25,000 crore loan it had taken for the acquisition of Corus, with a new term loan and revolving credit facility that have lighter obligations and reduced loan repayments.

Extended borrowing limits will enable the company to raise funds needed for capacity expansion and purchase of mines. Proposed projects include expansion in capacity at Jamshedpur to 10 million tonnes, building a new 6 mt steel plant at Kalinganagar in Odisha and global investments in raw material projects overseas. Tata Steel will spend about $800 million in Kalinganagar, about $600 million in Europe and about $400-500 million at Jamshedpur.

The company’s net debt totaled Rs 50,528 crore as on December 31, 2011. Through a follow-on public offer and bond issue, Tata Steel raised about Rs 4,977 crore.