Tata Sons Is Said to Raise $1.38 Billion in Upsized TCS Offering
(Bloomberg) -- Tata Sons Ltd., the holding company for India’s biggest business group, raised $1.38 billion after upsizing its offering of Tata Consultancy Services Ltd. stock, people with knowledge of the matter said.
Tata Sons priced its sale of Tata Consultancy shares at about 2,872 rupees apiece, the bottom of a marketed range, according to the people, who asked not to be identified because the information is private. It sold about 31.3 million shares, after originally offering 28.3 million shares to investors, one of the people said.
Shares of Tata Consultancy, Asia’s largest software developer, fell as much as 5.9 percent in Tuesday trading. They were down 5.1 percent, headed for the biggest one-day decline in more than three years, at 1:13 p.m. in Mumbai.
Tata Sons will use the proceeds to pay creditors of its wireless division, a person with knowledge of the matter said Monday. Tata sold Tata Teleservices Ltd.’s mobile-phone operations to Bharti Airtel Ltd. last year and pledged to pay the unit’s obligations.
It will also use the funds to raise its holdings in some listed units, the person said. Tata Sons may buy the stakes from other Tata Group affiliates, which would help to reduce cross-shareholdings, according to the person.
Tata Consultancy shares were offered at 2,872 rupees to 2,925 rupees each, according to terms for the deal obtained by Bloomberg earlier. An official at Tata Sons declined to comment on the final pricing.
The conglomerate has been planning to raise its ownership over time in five of its largest businesses including Tata Chemicals Ltd. and Tata Steel Ltd., Bloomberg News reported last year. 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. Last year, it boosted its stake in Tata Motors Ltd., the owner of Jaguar Land Rover.
Citigroup Inc. and Morgan Stanley are arranging the offering of Tata Consultancy stock, according to Monday’s terms. The price range represents a 4.2 percent to 5.9 percent discount to its last close.
The holding company is also seeking a $1.5 billion offshore syndicated loan, as it seeks to pay down expensive debt at its telecommunications unit, people familiar with the matter said last week. Tata Sons plans to use the proceeds to repay debt of units Tata Teleservices and Tata Teleservices Maharashtra, one of the people said at the time.
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