Tatas mop up Rs. 900 cr from TCS stake sale

Tata Sons on Tuesday raised about Rs 900 crore in a bulk deal that saw it selling 85 lakh shares of Tata Consultancy Services (TCS) at Rs. 1, 0589 per share, representing 8% of its equity stake in the IT Company.

TCS has ranks 5th in terms of market capitalization. Tata Sons has the majority of stake in this company. As on September the promoters held a stake of 83.64% (with Tata Sons having share of 79.5%). It is India’s largest company. Tata is expanding itself globally. Various companies under Tata have acquired companies abroad. The Tata has made a clear strategy of becoming true MNC.

To fund all the recent acquisitions it needs to raise capital. This is the best source of finance for the company. Even after selling 8% stake it will have a 71.5% stake in the company. So it will not affect its ownership in the company. The IT sector is booming and in the second quarter TCS had the highest profit among the Indian IT companies. This venture of Tata is growing at a rapid pace. TCS has also gone for acquisition of various small companies (small in compared of Tata Corus deal). Tata Tea has also acquired Energy brands of South Africa.

Mauritius based HSBC Global Investment Fund was the major buyer of the TCS shares. It bought around 70 lakh shares for Rs. 750 crore. Tata sons subsidiary Tata Steel UK will raise $5.6 billion as leveraged finance to finance the Corus deal. After buying Corus Tata will become India’s second largest company with a turnover of $22 billion.