TCS Stock Drops; What Is The Rs 9,000 Cr Block Deal In Which Tata Sons Sell TCS Shares?

After the shares of Tata Consultancy Services (TCS) were sold in a block sale by Tata Sons, the controlling company of the Tata Group, the shares dropped 3% to Rs 4021.25 on the stock market.

The Economic Times story states that the sale is estimated to be valued at around Rs 9,000 crore, based on an average share price of Rs 4,043 per share.

According to a term sheet released by JP Morgan and Citigroup, the transaction’s joint bookrunner, Tata Sons, began the process of a block sale on March 18th to sell shares of TCS up to 2.34 crore at a floor price of Rs 4,001 per share, reflecting a 3.65% discount over Monday’s closing price.

The share price of Tata Motors As of today, at 12.20, the price of Tata Motors shares has plummeted by 1.67% to ₹956. The stock value has decreased, as shown by the net change of -16.2. Following the announcement of Tata Sons’ stake sale, TCS’s share price declined by 3%.

What makes TATA pursue a block deal?
According to a report in the Times of India, Tata Sons is considering the option of shifting its debt to a different company in order to evade the RBI’s requirement that it list on the stock market.

According to The Times of India, by making this choice, the business may escape being regarded as an upper-layer NBFC and a CIC, as well as not having to go public.

Will Tata Sons reregister with the RBI as a CIC?
RBI designates any organisation as a CIC if it satisfies two requirements.

Business with a value of assets exceeding Rs. 100 crore.
having obtained governmental funding.
It is not necessary to register as a CIC if either requirement is not satisfied. In order to avoid having to do an IPO by September 2025, Tata Sons may decide to deregister from the CIC group, according to the reports.

What Is the NBFC “Upper Layer” of RBI?
The RBI has reportedly already rejected informal requests or concessions to remove non-banking financing firms (NBFCs) in the “upper layer” category from the required listing, according to a February 8 story in The Economic Times.

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