Getting set for Corus: Tata Sons raises Rs 900cr

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

Tata Sons, the investment firm of the group, sold 8.5 million shares of TCS at Rs 1059 apiece. Of this, overseas fund house HSBC Global Investment picked up 7.095 million shares, representing 0.72% stake, for Rs 751 crore. The identity of the buyer of the balance shares could not be confirmed.

According to the shareholding of TCS on September 30, Tata Sons holds 79.5% stake. The combined holding of the group, including shareholding of 13 other firms, in TCS stood at 83.64%.

Industry experts said the stake dilution was aimed at funding the aquisition of the Anglo-Dutch steel company Corus Group by Tata Steel.

"Considering that the Tata group holds a very comfortable level of shareholding in TCS and the group needs fund to finance its ambtitious acquisitions, it may go for further offloading of stake in TCS. However, the group will do it in a phased manner so that share prices of TCS does not take a beating," they added.

Tata Steel on October 20 announced acquisition of Corus Group for $8.04 billion TCS was the most traded counter on the BSE today with a total turnover of Rs 943 crore, which accounted for over 18% of the total BSE turnover of Rs 5,151 crore.

The cumulative turnover in TCS shares at the BSE and NSE soared past Rs 1,000 crore with 1.03 crore equity shares changing hands today. TCS recorded a turnover of Rs 165 crore with as much as 15 lakh shares on National Stock Exchange. Shares of the company today surged nearly 3% to Rs 1,106.25 per share at the BSE.

Tata Steel UK, the recently floated investment company of Tata Steel, has arranged a loan of $3.04 billion, a $666 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.