Tata Sons is poised to initiate the divestment of a 0.65 percent stake in Tata Consultancy Services (TCS), its flagship company, through an open market transaction slated for Tuesday, as per information provided in a term sheet. The plan involves the sale of 23.4 million shares at a floor price of Rs 4,001 per share.
The established base price, 3.7 percent lower than the closing price of TCS stock, is anticipated to generate Rs 9,362 crore ($1.13 billion) for Tata Sons. Investment banks JP Morgan and Citi have been entrusted with overseeing the share sale process.
This represents the second notable block deal in the domestic market this month, following British American Tobacco’s (BAT) divestment of a 3.5 percent stake in ITC on March 13, raising Rs 17,485 crore ($2.1 billion).
On Monday, TCS shares witnessed a 1.8 percent decline, closing at Rs 4,144 each, thereby valuing the software exporter at Rs 15 trillion. Currently, Tata Sons maintains a 72.38 percent stake in TCS, equating to a value of Rs 10.9 trillion.
In December, Tata Sons garnered approximately Rs 12,300 crore through the tendering of TCS shares in its Rs 17,000 crore buyback program. The buyback was executed at a price of Rs 4,150 per share. Since 2017, Tata Sons has raised around Rs 54,000 crore by tendering shares in buybacks.
Over the past year, TCS shares have seen an increase of nearly 33 percent, slightly outpacing the Nifty50 index, which has recorded a 30 percent rise.
In recent times, Tata Sons has come under the spotlight due to brokerage reports indicating its potential listing by September 2025 to comply with Reserve Bank of India (RBI) regulations. Registered as a core investment company, Tata Sons falls into the category of an “upper-layer” non-banking financial company (NBFC) as per the central bank’s classification.
According to a report by Spark PWM (formerly Spark Family Office and Investment Advisors), if Tata Sons were to be listed, it could command a market valuation ranging between Rs 7 trillion and Rs 8 trillion.
Tata Sons has strategically utilized its dividend income, channeling it towards either writing off non-performing assets or fueling ventures in new sectors. Notably, the conglomerate has ventured into e-commerce and made a significant entry into the semiconductor industry.
In collaboration with Taiwan’s Powerchip Semiconductor Manufacturing Corporation (PSMC), Tata Group is spearheading the establishment of India’s inaugural semiconductor fabrication plant in Dholera, Gujarat, with an investment outlay of Rs 91,000 crore. Additionally, Tata Semiconductor Assembly and Test is gearing up to establish a chip assembly and testing facility in Morigaon, Assam, with an investment totaling Rs 27,000 crore.
Sources: Business Standard