Published: Tue, March 13, 2018
Money | By Armando Alvarado

Tata Sons to sell 1.48% stake in TCS, raise Rs8,500 cr

Tata Sons to sell 1.48% stake in TCS, raise Rs8,500 cr

In another transaction, around 1.07 crore shares of TCS were offloaded at Rs 2871.19 apiece.

Tata Sons Ltd, the holding company for India's biggest business group, is selling about $1.25 billion worth of its stake in software services provider Tata Consultancy Ltd, perhaps the group's biggest revenue-earner.

Tata Sons, which holds about 74% in TCS, will sell the software biggie's shares at a price between Rs 2,872 and Rs 2,925 apiece. The price range represents a 4.2 percent to 5.9 percent discount to its last close. On the other hand, a "block deal" is a transaction of over 500,000 shares - or a minimum value of Rs 5 crore - executed through a single transaction.

Citigroup and Morgan Stanley managed the offering. According to Motilal Oswal, these trades are done on a special window that opens for 35 minutes in the morning trading hours.

Tata Sons will use the proceeds to pay creditors of its wireless division, according to a person with knowledge of the matter.

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Past year in October, Tata Group had agreed to sell its loss-making mobile telephony business to Bharti Airtel on "a debt-free cash-free basis".

The holding company is also seeking a $1.5 billion offshore syndicated loan, as it seeks to pay down expensive debt at its telecommunications unit, people familiar with the matter said last week. In 2017, Tatas had announced that Tata Teleservices will merge with Bharti Airtel on a no-debt, no-cash basis.

The use of proceeds from the stake sale will be used by Tata Sons to strengthen its solvency position its balance sheet.

Tata Teleservices earlier had a debt of around Rs 30,000 crore of which it has repaid Rs 17,000 crore.

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