In a major move, the Tata group has hiked its stake in the three Tata Electric Companies (TEC), with the largest increase effected in Tata Power where the groups holding jumped from 16.03 per cent to 21.03 per cent.
Top Tata sources confirmed the deal and said the shares have been picked up by various group and investment companies, thereby marking the start of a major phase of consolidation of holdings by the Tata groups management.
The investment companies are said to have bought up to two per cent of TECs equity to beat Sebi takeover regulations which stipulate that promoters and their associates can only buy two per cent per year of the group companys equity without attracting an open offer.
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In the Andhra Valley Power Supply Company Ltd, the Tata group stake has risen from 21.68 per cent to 25.12 per cent while in Tata Hydro-Electric Power Supply Company Ltd, the promoters stake has settled at 15 per cent, up from 14.51 per cent. Along with Tata Power, the three companies constitute what is called the Tata Electric Companies (TEC).
Tatas plan to use the investment companies to pick up small stakes in the core group companies including Tisco, Telco and TEC, thereby achieving the target of reaching 26 per cent. This will create a much larger and expanded cross-holding structure within the group.
Group sources said group holding in the TEC flagship, Tata Power, is expected to rise to between 26-28 per cent from 21.03 per cent.
Other shareholders in Tata Power include Life Insurance Corporation which holds 6.41 per cent, GIC and other insurance companies which hold 7.16 per cent, UTI 8.85 per cent, other FIs 2.56 per cent, mutual funds 11.50 per cent, FIIs & GDR holders 8.40 per cent, individuals 38.92 per cent and banks 0.17 per cent.
The Tata Sons board had earlier decided to increase its holding in the major group companies like Telco, Tisco, and the Tata Electric Companies, to 26 per cent.