In a block deal valued at ₹9,362.3 crore ($1.13 billion), Tata Sons, the holding company of the Tata Group, will sell 2.34 crore shares, or 0.65% of the equity in Tata Consultancy Services.
The floor price of the deal has been set at ₹4,001 per share, which represents a 3.65% discount to TCS’s closing price today, per the term sheet obtained by Businessline. According to sources, the transaction is expected to close on Tuesday. Citigroup and JP Morgan are the joint book runners for the transaction.
Tata Sons is the owner of 72.38% of TCS, as per the December-end filing.
In order to raise money to settle debt and stabilise balance sheets, holding companies and promoter entities typically sell their shares in group companies. BAT Plc, a British tobacco company, recently sold a 3.5 percent stake for ₹16,690 crore to its Indian associate, ITC Ltd. The main goals of this monetisation were to continue the deleveraging process and buy back the company’s shares.
At the end of March 2023, Tata Sons’ net debt was ₹20,642.47 crore, compared to ₹35,058.47 crore for its FY23 revenue. The Tata Group’s market capitalization increased from ₹20.7 crore at the end of March of last year to ₹30 lakh crore last month.
It is an upper-layer NBFC as well as a core investment company that is registered with the Reserve Bank of India. The RBI mandates that it list its shares for the upcoming year.
Over the course of a year, TCS’s shares have increased by almost 32%.
Regarding the proposed deal, Tata Sons’ reduction of their stake in TCS would not affect the MSCI Index’s flow or float, according to Nuvama Alternative & Quantitative Research. Later dates should see changes to the float for the FTSE, Sensex, and Nifty50 indexes, totaling a $120-130 million flow.
After BAT Plc and Interglobe Aviation, in which Rakesh Gangwal sold a stake for ₹6,787 crore, this is the second significant block deal this month.
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