In the biggest block trade this year, Tata Sons will sell a 1.5 percent stake in TCS, worth nearly USD 1.3 billion (Rs 8,500 crore), through the stock exchanges between March 13 and March 15.
The money raised from the stake sale will be used by Tata Sons to strengthen its balance sheet. The plan is to pare the debt in the wireless telecom units — Tata Teleservices and Tata Teleservices (Maharashtra) — and to shore up equity interests in key Tata group companies. Tata Sons, which holds about 74 percent in TCS, will sell the software biggie’s shares at a price between Rs 2,872 and Rs 2,925 apiece. The selling price range is a 4-6 percent discount to TCS’ Monday closing price of Rs 3,052 on the BSE.
Tata Group’s telecom business has a debt of over Rs 40,000 crore even as the sale of the consumer wireless unit to Bharti Airtel awaits regulatory approvals. Tata Sons announced the sale of the consumer mobile services business to Airtel in October 2017 and had agreed to take care of the unit’s debt obligations. Last week, Tata Sons said that it will buy a 7 percent stake in group company Indian Hotels for over Rs 1,000 crore on or after March 13, which will increase its stake from 30 percent to 37 percent in the hospitality chain.
Tata Sons’ move to sell over 28 million shares of TCS comes almost 10 months after it received Rs 11,722 crore by participating in the software major’s share buyback programme. After the block deal, Tata Sons will hold about 73 percent in TCS, which generated USD 18 billion in revenues in fiscal 2017. TCS is the most-profitable unit within the USD 100 billion-plus Tata Group, followed by Jaguar Land Rover.
TCS is also one of the most valued companies in India. In the last few months, the number one and number two slots in terms of market capitalisation has been shifting between TCS and RIL. TCS’ block trade data from the NSE showed that the last such deal by the parent Tata Sons happened in February 2007 when it sold 83 lakh shares of Asia’s largest software developer for Rs 842 crore. –TOI