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Tata Sons plans to sell Rs 9,300 crore tranche of TCS


Mumbai: Son Tatathe holding company of Tata Consulting Services (TCS), plans to sell 23.4 million actions in India’s largest exporter of software services for at least ₹9,300 crore on Tuesday, showed a term sheet released by JP Morgan, the banker for the deal. The floor price of the stock, amounting to 0.65% of the company’s equity, has been set at ₹4,001 apiece, representing a discount of 3.6% to Monday’s closing price .

As of December 31, 2023, Tata Sons held a 72.38% stake in TCS. The stock slipped 1.75 per cent to ₹4,144.75 on the BSE on Monday. TCS has a market capitalization just north of ₹15 lakh crore, almost half of the total market value of all Tata Group listed companies at ₹31.09 lakh crore.

The stock, the second largest in value in the country, has jumped 30% over the past year, supported by a buyback program.


Strategic investments
The buyback plan helped TCS shares partially cushion the impact of moderate business expansion in the company’s core revenue markets of the United States and Western Europe.

Tata Sons Chairman N Chandrasekaran said last month that the group would make a significant investment in electronics and semiconductors, including setting up a specialized factory for multi-node semiconductor production. Chandrasekaran highlighted that Tata has been making strategic investments for the future, and semiconductors are one of them.

The Tata Group is establishing the country’s first semiconductor manufacturing plant in Dholera, Gujarat, with an investment of Rs 91,000 crore. Tata is also setting up the upcoming chip assembly and testing unit of Tata Semiconductor Assembly and Test in Assam, with an investment of Rs 27,000 crore.

Tata Sons plans to invest another $1 billion in Tata Digital over the next few years. It has already invested more than $2 billion in the Neu app and has obtained board approval for a further capital injection over a five-year period.

TCS bought back 40.9 million shares in December for Rs 17,000 crore. Following the latest buyout, the combined stake of the promoter entity in the largest Tata group company increased from 72.3 per cent to 72.41 per cent.

Registration plans
Separately, Tata Sons, owner of Tata Capital, must be listed by September 2025 to comply with Reserve Bank of India regulations.

Earlier reports by ET indicated that Tata Sons was working to restructure itself to comply with central bank norms. This follows the RBI’s refusal of an informal request to grant exemptions from the mandatory list of so-called ‘upper layer’ NBFCs. Tata Sons is the holding company of the Tata Group.

One of the options being considered could involve transferring the stake in financial services firm Tata Capital to another entity, which could be one of the main reasons why Tata Sons is classified as ‘upper tier’, according to an executive familiar with the matter. Several options were under consideration, official sources told ET earlier.


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