Tata Sons, the parent company of the Tata Group, has decided to sell a portion of its shares in Tata Consultancy Services (TCS), which is a leading software company in its industry. They waited for the right time for the stock to go high and make a good profit.
Rs. 9000/- Crore Earned
Tata earned Rs. 9000 crore by selling these shares, but no one knows the solid reason behind Tata’s big steps. Here are four reasons that experts believe might be the reason:
1. Finding growth plans
Tata Group, led by Chairman N Chandrasekaran, is interested in getting its hands on the market of semiconductors and wants to expand into semiconductor manufacturing and digital products. Selling shares of TCS will help them raise money for this project.
2. To reduce debt and avoid an IPO
Tata Son has a huge debt of around 21,909 crores, and reducing this debt is crucial for them. They are avoiding going public for it and doing all they can to avoid an IPO. Selling TCS shares will improve their financial position and help them achieve their objective of avoiding an IPO
3. Taking advantage of high valuations
Recently, TCS saw a huge jump in its stock prices and reached a good price range due to a strong market. So selling these shares won’t affect their ownership much, but it will provide them with a substantial amount of cash for their operations.
4. There is little to no impact on their ownership.
Tata Sons still owns a large majority of TCS shares, even after selling a small portion. So, selling this small percentage doesn’t significantly affect their ownership, but it does provide them with a substantial amount of cash.
What do you think is the motive behind the Tata Sons block deal move? Feel free to discuss below.
