Tata Sons to sell 23.4 million TCS shares worth ₹9,000 crore in block deal

Tata Sons holds a majority stake of 72.38% in TCS, whose shares have surged by 30% over the past year. 

The stake sale could potentially allow Tata Group to circumvent a public market listing for Tata Sons as stipulated by the Reserve Bank of India, which requires all so-called ‘upper layer’ non-banking finance companies (NBFCs) to list on the stock exchanges.

TCS shares on Monday climbed to an all-time high of ₹4,254.45 apiece on BSE, but ended the day 1.7% lower at ₹4,144.75 a share.

Also read: Tata Steel, JSW Steel, Jindal Steel Power, SAIL share prices gain up to 5% on strong China industrial output numbers

With a market capitalization of ₹15 trillion, TCS stands as India’s second most-valued listed company, trailing Reliance Industries Ltd.

Tata Sons has proposed to offer the TCS stock at a discounted rate of 3.6% compared to Monday’s closing price.

Tata Group stocks gained attention in March following a report from Spark Capital discussing the potential listing of Tata Sons by September 2025. This move is anticipated as by then Tata Sons would have completed three years since its notification as an upper-layer NBFC by RBI.

If Tata Sons chooses to restructure its debt by either repaying loans or transferring its stake in Tata Capital Financial Services Ltd to another entity, it can risk losing its status as a core investment company, or CIC, and as an upper-layer NBFC, according to the report.

With borrowings exceeding ₹20,000 crore, Tata Sons may escape the purview of RBI’s CIC regulations by reducing its borrowings to below ₹100 crore, as per reports.

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Published: 18 Mar 2024, 04:44 PM IST