TCS plunges 6% on share sale buzz

TCS plunges 6% on share sale buzz

Tata Sons, the promoter of major operating companies of the Tata group, was planning to raise around Rs 8,200 crore by selling stake in the IT major, the PTI said quoting investment banking sources.

Earlier on Monday, Bloomberg reported that Tata Sons will sell 28.27 million shares or 1.48% stake in TCS at between Rs2,872 and Rs2,925 a share. Tata sold Tata Teleservices' mobile-phone operations to Bharti Airtel a year ago and pledged to pay the unit's obligations. A part of the proceeds will be used to raise its holdings in some listed units, the report added.

Since previous year, the conglomerate has been planning to increase its ownership in its largest businesses including Tata Chemicals Ltd. and Tata Steel Ltd. Tata Sons is buying an additional 6.6 percent stake in Indian Hotels Co. that was held by Tata Trusts, according to a stock exchange filing this month.

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A private security guard stands at the exit gate of the headquarters of Tata Consultancy Services (TCS) in Mumbai, India October 13, 2016.

That would be a discount of 4.2 to 5.9 percent to TCS's Monday closing price of 3,052.15 rupees.

In addition, the holding company is seeking a $1.5 billion offshore syndicated loan, to pay down expensive debt at its telecommunications unit. The plan is to reduce the considerable debt obligations in the wireless telecom units - Tata Teleservices and Tata Teleservices (Maharashtra) - and to spruce up equity interests in key Tata group companies.

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