Global player British Telecom today began sale of a part of its over 23% stake in IT major Tech Mahindra in the open market.
Shares of Tech Mahindra came under pressure on the BSE as well as the NSE as they were being sold at a discount to the prevailing market price, according to the investment bankers handling the deal.
While BT may sell as much as 5-10% stake, within the first hour of trade this morning, shares worth over Rs 600 crore -- accounting for close to 6% equity in the company had changed hands. However, it could not be ascertained as to how much of this has been sold by BT.
Investment bankers said they were open to the idea of continuing the stake sale tomorrow as well.
Tech Mahindra shares fell 7.25% to Rs 775 on the BSE in the morning trade. The company commands a market capitalisation of around Rs 10,000 crore. The group is in the process of merging its another IT firm Mahindra Satyam with Tech Mahindra.
Sources have said that BT has been looking at part-sale of its stake in Tech Mahindra for quite some time, but has been waiting for right market conditions to go ahead.
At the end of last quarter, the total promoter holding in Tech Mahindra stood at 70.78%, which included 47.57% with Mahindra & Mahindra, 23.16% with BT Plc and 0.05% with Mahindra BT Investment Company Mauritius Ltd.
BT is also a major customer for Tech Mahindra.
In the fiscal ended March 2012, BT group purchased services worth 253 million British pounds (over Rs 2,000 crore) from Tech Mahindra, which it terms as a principal associate in India.
The net value of services purchased in the fiscal ended March 2011 was 258 million pounds, and 301 million pounds in the year prior to that.
The amount outstanding and payable for services at March 31, 2012 to Tech Mahindra was 51 million pounds (about Rs 500 crore).
In 2010 a cash payment of 127 million pounds (over Rs 1,100 crore) was made to Tech Mahindra for the renegotiation of certain supply contracts as part of the rationalisation of procurement channels within BT Global Services.
