TCS shares slip 5% after Tata Sons offloads stake via block deal

Darnell Taylor
March 13, 2018

Shares of Tata Consultancy Services (TCS) tanked over 5 per cent on Tuesday on news reports that Tata Sons, the promoter of major operating companies of the Tata group, is planning to raise around Rs 8,200 crore by selling stake in IT major.

It will also use the funds to raise its holdings in some listed units, the person said, asking not to be identified because the information is private.

Tata Sons will use the proceeds to pay creditors of its wireless division, the Bloomberg report added.

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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. While a year ago Tata Songs boosted its stake in Tata Motors Ltd, the owner of Jaguar Land Rover, it is also planning to buy 6.6 percent additional stakes in Indian Hotels Co. that was held by Tata Trusts. Last year, it boosted its stake in Tata Motors Ltd., the owner of Jaguar Land Rover. This is lower than Monday's close of Rs 3,052.15 on the National Stock Exchange. Citigroup Inc. and Morgan Stanley are the bankers to the sale.

In addition, the holding company is seeking a $1.5 billion offshore syndicated loan, to pay down expensive debt at its telecommunications unit.

Tata Sons intends to use the proceeds from the share sale to reduce debt in the group's telecom arm Tata Teleservices which has debt of around Rs 40,000 crore, the sources told PTI. During the day, it slipped 5.49 per cent to Rs 2,884.10.

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