Tata Sons Seeks $1.1 Billion From TCS Share Sale, Terms Show

(Bloomberg) --

Tata Sons Ltd. is seeking to raise at least $1.1 billion selling shares in the Indian conglomerate’s software services unit, according to terms of the deal obtained by Bloomberg News.

The deal involves an offer to sell 23.4 million shares in Tata Consultancy Services Ltd. at a floor price of 4,001 rupees ($48.3) apiece, terms showed. That’s a discount of 3.7% to Monday’s closing price for TCS shares.

The offer adds to a string of big block sales taking place in India, the latest being British American Tobacco Plc’s $2.1 billion sale in its partner ITC Ltd. earlier this month. A rally in local shares and high valuations have helped big holders to take profit by selling stakes in companies, while domestic and global funds seek to increase their ownership of Indian firms.

Tata Sons’ offer for sale of a 0.65% stake in Tata Consultancy, the country’s biggest information technology firm, comes on the back of the Mumbai-listed firm’s shares surging to a record last week. They have gained more than 20% since low levels in November. 

Citigroup Inc. and JPMorgan Chase & Co.’s units will be managing the share sale that is expected to take place on Tuesday, according to the terms. The deal will have 180-day lock-up on the seller.  

Tata Sons, the holding firm of the conglomerate that owns Jaguar Land Rover maker Tata Motors Ltd., could fetch a valuation of as much as 8 trillion rupees in an initial public offering, Mumbai-based investment banking firm Spark PWM Pvt. said earlier this month.

Following the share sale, Tata Sons will hold a more than 71% stake in Tata Consultancy, the second-biggest Indian firm by market valuation after Reliance Industries Ltd., according to data compiled by Bloomberg.

(Updates with details from third paragraph onwards)

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