Tata Sons raises Rs 900 cr by selling 0.86% in TCS

The Tata group today mopped up Rs 900 crore by selling less than a 1 per cent stake in its software company, Tata Consultancy Services (TCS), in the open market.

Tata Sons, the investment firm of the group, sold 8.5 million shares (0.86 per cent) of TCS at Rs 1,059 per share. Of this, overseas fund house HSBC Global Investment picked up 7.095 million shares, representing a 0.72 per cent stake, for Rs 751 crore. The identity of the buyer of the remaining shares could not be confirmed.

According to TCS' shareholding pattern on September 30, Tata Sons holds 79.5 per cent in the company. The combined holding of the group, including shareholding of 13 other firms, in TCS stood at 83.64 per cent.

Industry experts said the dilution was aimed at funding the acquisition of the Anglo-Dutch steelmaker Corus by Tata Steel. "Considering that the Tata group holds a very comfortable level of shareholding in TCS and the group needs funds to finance its ambitious acquisitions, it may go for further offloading of stake in TCS. However, the group will do it in a phased manner so that the share price of TCS does not take a beating," they added.

Tata Steel announced the acquisition of Corus for $8.04 billion on October 20.

TCS was the most traded counter on the Bombay Stock Exchange (BSE) today with a total turnover of Rs 943 crore, which accounted for over 18 per cent of the BSE's total turnover of Rs 5,151 crore.

The cumulative turnover in TCS' shares on the BSE and the National Stock Exchange (NSE) soared past Rs 1,000 crore, with 10.3 million equity shares changing hands today. TCS recorded a turnover of Rs 165 crore with as much as 1,500,000 shares on the NSE. Shares of the company today surged nearly 3 per cent to Rs 1,106.25 at the BSE.

Tata Steel UK, the recently floated investment company of Tata Steel, has arranged a loan of $3.04 billion, a $666 million revolving credit facility and a $2.56 billion mezzanine bridge loan through Credit Suisse, ABN AMRO and Deutsche Bank.

The rest of the bid will be funded by a cash contribution of $3.49 billion from Tata Steel to Tata Steel UK. Also, Standard Chartered Bank has provided $373 million of subordinated debt financing to Tata Steel UK.