TCS Stock Falls; Tata Sons Sells Shares Of TCS In Rs 9,000 Cr Block Deal, What Is It?

Tata Group holding company Tata Sons likely sold around 2.02 crore shares in Tata Consultancy Services (TCS) in a block deal after which the shares fell 3% to Rs 4021.25 on stock market.

The deal is reported to be worth around Rs 9,000 crore at an average share price of Rs 4,043 per share, according to the Economic Times report.

Tata Sons started the process of a block deal on 18th March, to sell shares of TCS up to 2.34 crore at a floor price of Rs 4,001 per share, representing a discount of 3.65% over Monday’s closing price,according to a term sheet issued by JP Morgan and Citigroup – joint book-runners to the deal.

Tata Motors share price Today :

At 12.20, Tata Motors stock is currently priced at ₹956, which tanked by 1.67%. The net change is -16.2, indicating a decline in the stock value. TCS share price drops 3% after Tata Sons stake sale news.

Why Is TATA Going For A Block Deal?

To avoid the RBI’s mandate to get listed in the stock market, Tata Sons is exploring the possibility of transferring its debt to a separate entity, according to the Times Of India report.

The Times of India reported that this decision can prevent the company from being considered a CIC and an upper-layer NBFC, and they can avoid the need for a public listing.

Tata Sons To Deregister As A CIC From RBI ?

RBI declared any entity as CIC after it meets two conditions

Company With an asset size of more than Rs. 100 crore.

Having raised public funds.

If either condition is not met, it is not required to be registered as CIC. According to the reports, Tata Sons may choose the path to deregister itself from CIC group in order to avoid a mandatory IPO by September 2025.

What Is RBI ‘Upper Layer’ For NBFCs?

According to The Economic Times report on February 8, the RBI has already declined informal requests or concessions to exempt from the mandated listing of non-banking finance companies (NBFCs) in the ‘upper layer’ category.

Tata Sons is registered with RBI as a CIC and classified as an upper-layer non-banking financial company (NBFC).