Tata Sons sells shares worth almost Rs 9000 cr in TCS

Tata Sons Ltd India’s biggest business group plans to sell $1.25 billion of its stake in Tata Consultancy Services, according to terms of the transaction

Tata Sons Ltd India’s biggest business group plans to sell $1.25 billion of its stake in Tata Consultancy Services, according to terms of the transaction

Tata Sons had 73.5% stake in the software company at the end of December 2017. According to bulk deal data available with the NSE, Tata Sons has sold little over 3.12 crore shares in TCS through two transactions. Tata Sons also has to repay debt of around Rs 35,000 crore owed by Tata Teleservices, which is now expected to merge with Airtel, industry sources said.

Shares of Tata Consultancy, Asia's largest software developer, fell as much as 5.9% in Tuesday trading. Tata Sons is buying an additional 6.6 percent stake in Indian Hotels Co. that was held by Tata Trusts, according to a stock exchange filing this month. They were down 4.9 per cent on the BSE, headed for the biggest one-day decline in more than a year, at 1.20 pm.

Since a year ago, the conglomerate has been planning to increase its ownership in its largest businesses including Tata Chemicals Ltd. and Tata Steel Ltd. Last year, it boosted its stake in Tata Motors Ltd., the owner of Jaguar Land Rover.

According to analysts, using the stock of TCS to deleverage the parent company's balance sheet market sense "It is always better to use a stock as a currency to deleverage balance sheet when you have a higher stake in a company", said a fund manager who did not want to be named. Citigroup Inc. and Morgan Stanley are the bankers to the sale. The latter had to shell out $1.2 billion to NTT DoCoMo past year in order to settle the long-standing dispute with the Japanese telecom giant after it exited their joint venture in 2013.

Tata Sons plans to use the money it raises to pay lenders to the company's subsidiary Tata Teleservices and raise stake in some other units, unidentified people told the news outlet.

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