Tata Sons plans to sell TCS shares worth ₹9,000 Crore: Reports

19 Mar 2024 , 10:32 AM

Tata Sons, the parent company of India’s largest software services exporter, is proposing to sell 2.34 Million TCS shares at a floor price of ₹4,001 per share in block agreements for around ₹9,300 Crore. The floor price is 3.6% below Monday’s closing price.

Tata Sons controls the bulk holding of 72.38% in TCS, the shares of which have gained 30% in the previous year.

TCS, with a market capitalisation of ₹15 Lakh Crore, is India’s second most valuable listed company after Reliance Industries (RIL).

The fundraising might be part of a strategy by the Tata Group to avoid Tata Sons’ IPO under RBI regulations that prohibit all ‘upper layer’ non-banking financing firms (NBFCs) from being listed on stock markets.

Earlier this month, the market was buzzing with speculations that Tata Sons intends to list on stock markets under RBI regulations and that the IPO to dump a 5% interest might be valued at around ₹55,000 Crore, valuing the holding firm at ₹11 Lakh Crore. Later, ToI reported that the salt-to-software conglomerate is looking into several options for restructuring its balance sheet in order to avoid being public.

If Tata Sons restructure debt by repaying borrowings or transferring its stake in Tata Capital to another business, it may be deregistered as a core investment company (CIC) and upper-layer NBFC.

The RBI has set September 2025 as the deadline for all upper-layer NBFCs, including Tata Sons, to be listed.

After the RBI allegedly declined to grant Tata Sons an exemption, fearing that it might lead to similar demands from other corporate holding companies, the business has been consulting with legal and financial specialists to find a solution.

Tata Sons has borrowings of more than ₹20,000 Crore. According to sources, if the borrowings are reduced to less than ₹100 Crore, they will no longer be subject to the RBI CIC regulation.

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