In early trade on Tuesday, shares of Tata Consultancy Services (TCS) fell by 3% due to reports that the controlling company of the Tata Group, Tata Sons, sold around 2.02 crore worth of the IT firm in a block sale.
TCS shares dropped 3% on the Bombay Stock Exchange (BSE) after this transaction, closing at Rs 4021.25. The average share price of Rs 4,043 is used to determine the deal's approximate worth of Rs 9,000 crore.
The goal of the Tata Sons-initiated block sale was to sell up to 2.34 crore TCS shares at a floor price of Rs 4,001 a share, or 3.65% less than the closing price of the day before.
However, later in the evening, when the stock exchanges release the data, the buyer and seller's final confirmation will be made public.
It should be mentioned that TCS, the biggest software services exporter in India and the second-most valuable listed firm with a market capitalization of 14.5 lakh crore, is primarily owned by Tata Sons, with a 72% interest.
There is conjecture that Tata Sons' decision may have been influenced by the need to reduce debt and the investigation of investments in developing industries like semiconductors, even though an official statement outlining the reasoning behind the stake sale has not yet been made public.
Furthermore, with the Reserve Bank of India's (RBI) regulatory limitations on non-banking financing businesses, the transaction may possibly be a calculated move to avoid the likelihood of Tata Sons' IPO.
In response to allegations that the RBI had refused to provide Tata Sons with an exemption, which would have prompted similar demands from other corporate holding companies, Tata Sons has been consulting with legal and financial specialists on how to handle the matter.
With borrowings reaching more than Rs 20,000 crore, Tata Sons wants to keep below the Rs 100 crore threshold and avoid the RBI's regulatory wrath. The majority of the shares are held by the Dorabji Tata Trust (28%) and the Ratan Tata Trust (24%), however the Tata Group also has a number of cross-holdings across its many businesses.
Even after selling a portion of its business, the Tata Group remains the most valuable conglomerate in India with a market value of over Rs 30 lakh crore. Half of this value is accounted for by TCS alone.
