After hitting a new 52-week high on March 18th at Rs. 4,254.75, the share price of Tata Consultancy Services Limited moved down by nearly 3.31% to Rs. 4,014 on NSE in the morning trading session of Tuesday, compared to its previous closing price of Rs. 4,152.5.
With a market capitalisation of Rs. 14.52 lakh crores, at 11:50 a.m., the shares of the company were trading in the red at Rs. 4,018, down by nearly 3.24 percent. In the last five trading days, the stock fell by nearly 4.7 percent.
In the last one year, the company has delivered positive returns of about 27.8 percent and nearly 11.4 percent of positive returns in the last six months. So far in 2024, it has given positive returns of around 5.4 percent.
According to the December filings on the stock exchanges, Tata Sons raised around Rs. 12,300 crore by tendering TCS shares in its Rs. 17,000 crore buyback of about 4.09 crore equity shares.
Holding company to sell stake in TCS
The holding company of TCS, Tata Sons, is offering to sell about 2.34 crores equity shares through block deals, representing a 0.65 percent stake, in the company to raise a total of Rs. 9,300 crore.
The floor price for the issue was set at Rs. 4,001 per share, a discount of about 3.46 percent from its previous closing price of Rs. 4,144.75 on BSE.
According to Business Today, as of 9:30 a.m., around 2.48 crore of shares of the company, valued at Rs. 9,976 crore exchanged hands on the BSE, while 40.8 lakh shares worth Rs. 1,646 crore were traded on the NSE at the same time.
As per the shareholding data available on the BSE, Tata Sons Private Limited holds nearly 261.88 crore shares or a 72.38 percent stake in India’s largest software exporter, as of December 2023.
Is Tata Sons’ IPO a rumour or real?
A few days back, a note from Spark Capital referred to a possible listing of Tata Sons on the stock exchanges by September 2025, as it will complete three years of being recognised as an upper-layer NBFC by the RBI.
The RBI requires upper-layer NBFCs to be listed within three years of notice by the central bank, which Tata Sons received in September 2022.
However, the intention behind the holding company for selling its stake in TCS is to reduce its debt, fund semiconductor capex, and restructure its balance sheet in order to avoid the possibility of Tata Sons’ IPO.
If Tata Sons restructures debt by repaying, borrowing or transferring the holding in Tata Capital to another entity, it may get deregistered as a core investment company (CIC) and upper-layer NBFC.
Following the reported denial by the RBI to grant an exemption to Tata Sons, fearing that it might lead to similar demands from other corporate holding companies, the company is currently engaged in consultations with legal and financial professionals to explore potential solutions.
Tata Sons has borrowings exceeding Rs. 20,000 crore, and if it reduced its debt below Rs. 100 crore, it can escape falling under the purview of the RBI CIC rule regulation, according to sources.
Written by Shivani Singh
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