TCS plunges 6 per cent on share sale buzz

Mae Love
March 13, 2018

The company, on Tuesday, sold about 31.3 million shares, after originally offering 28.3 million shares to investors, said a Bloomberg report. The company will also use the funds to raise its stake in some of its unit in a bid to reduce cross holdings, the person said asking not to be identified as the matter is private.

The offering for the Tata Consultancy stocks are to be arranged by Citigroup Inc. and Morgan Stanley with a price range representing a 4.2 percent to 5.9 percent discount to its last closing.

Led by the drop in the stock, the company's market valuation tumbled Rs 30,512.89 crore to Rs 5,53,698.11 crore.

After the proposed share sale, Tata Sons holding in Tata Consultancy Services (TCS) will come down to around 72 per cent from 73.52 per cent as on December, 2017.

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The use of proceeds from the stake sale will be used by Tata Sons to strengthen its solvency position its balance sheet.

The benchmark BSE Sensex, which opened at 33,818.22 points, closed at 33,856.78 points - down 61.16 points or 0.18% percent from the previous session's close.

The stock was the worst hit among the bluechips on both Sensex and Nifty during the morning trade.

Tata Sons, which holds about 74% in TCS, will sell the software biggie's shares at a price between Rs 2,872 and Rs 2,925 apiece. Tata sold Tata Teleservices' mobile-phone operations to Bharti Airtel past year and pledged to pay the unit's obligations.

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