MUMBAI - India's Tata Steel and Suzlon Energy Ltd launched global depositary share offers on Monday to raise a combined $575 million, sources said, leaning on a share market rally and rising foreign appetite for Indian offers.

The two offerings follow last week's $1.5 billion sale of American Depositary Shares by Indian metals producer Sterlite Industries in the largest U.S. share sale from India in two years.

Tata Steel, the world's sixth-largest steel maker, will sell GDRs worth $400 million, three sources said.

Suzlon, the world's No. 5 wind turbine maker, was offering $175 million in GDRs, two other sources said.

The offer will open in a bit. We hope to formally launch it in a while, a person involved in the Tata Steel deal said.

Citigroup and JPMorgan were arranging the deal for Tata Steel, and Deutsche Bank was the arranger for Suzlon.

The sources declined to be named as they are not authorised to speak to the media.

Officials at Tata Steel and Suzlon Energy could not immediately be reached for comment.

The deals come amid a flurry of capital-raising by Indian firms looking to retire debt, fund expansion and acquisitions in Asia's third-largest economy.

Before Monday's deals, Indian companies had raised about $6.5 billion in equity issuance this year, compared with $5.9 billion over the same period a year ago, according to Thomson Reuters data.

The sales have been powered powered by a 89 percent rally in the benchmark .BSESN from 2009 lows in mid-March and $8.5 billion net inflows by foreign funds.

More equity issuance is in the pipeline from India, with Adani Power set to launch a $600 million initial public offer, the first major issue in 18 months, on July 28, and state-run utility NHPC expected to launch its IPO on August 7.

Also on Monday, Indiabulls Financial Services was raising $200 million through a private placement of shares to institutions, sources said.

FUNDING GROWTH, CUTTING DEBT

Tata Steel, which bought Anglo-Dutch steel maker Corus in 2007, would most likely use the funds to meet expansion in India and also inject cash into its UK unit, the sources said.

Tata Steel, which gets a quarter of its revenue from India, is raising capacity to 9.8 million tonnes from 6.8 million. The company expects Indian demand to grow 25 percent in 2009/10.

As part of a revised debt covenants package with lenders, Tata Steel has said it would inject 425 million pounds ($700 million) into Tata Steel UK in a phased manner.

Sources had said earlier this month Tata Steel was looking to raise as much as $600 mln through a GDR sale.

Suzlon has said it aims to sell assets and shares to lower its debt, which quadrupled to $2.45 billion in the fiscal year ended March.

The firm said it had shareholder approval to sell shares worth up to 50 billion rupees.

Tata Steel shares ended 0.4 percent lower on Monday at 391.10 rupees and Suzlon closed 1.5 percent lower at 94.20 rupees in a Mumbai market that rose 3 percent. But both stocks have almost trebled from their March lows. (US$=48.2 rupees) (Reporting by Nishant Kumar, Tony Munroe and Narayanan Somasundaram; Editing by John Mair)

India Tata steel Launch