Shares of Tata Consultancy Services tumbled around 4.2 per cent on Tuesday, after a little over 2 crore shares, or about 0.6 per cent of its equity, was sold via a block deal.
The seller is expected to be Tata Sons, the holding company of the Tata Group. Tata Sons had initiated a process to sell around 2.34 crore shares of the software services exporter. The deal is estimated to worth around Rs 9,362 crore and the floor price was reported to be at Rs 4,001 a share, which was at a 3.7 per cent discount to the Monday's closing price.
According to data from BSE, TCS saw volumes of close to 2.54 crore on Tuesday, compared to a two-week volume average of around 1 lakh shares. Exchanges release data on buyers and sellers in block deals in the evening.
TCS shares hit a life high of Rs 4,254.45 on Monday, but closed lower at Rs 4,144.75 on the BSE. On Tuesday, it was further trading 4.19 per cent lower at Rs 3971.00 when the market closed. The broader BSE Sensex was down 605 points, or 0.8 per cent, at around 72,157 levels.
As of December 31, the promoters held 72.41 per cent stake in TCS. While Tata Sons held 72.38 per cent stake, Tata Investment Corporation held 0.03 per cent.
The stake sales comes at a time the Tata Group is betting heavily on expanding the airline business, after acquiring Air India in 2022 and has big plans in the technology space. It is investing Rs 27,000 crore in Assam to set up a facility for assembly and testing of semiconductor chips. Tata Electronics is also building a mega semiconductor fabrication facility in Gujarat's Dholera, the construction of which will begin this year, with a total investment of up to Rs 91,000 crore.
Earlier this month, a report by Spark Capital had opined that Tata Sons may have to go public by September 2025, to meet RBI's regulations. Tata Sons has been named among the 15 upper layer non-banking finance companies. RBI mandates such upper layer NBFCs must list on the stock exchanges. Some suggest that the TCS share sale by the promoter could also be a part of a move by Tata Sons to avoid the potential listing.
As far as TCS goes, analysts have remained bullish, despite the overall weak demand environment for software exporters.
Analysts at broking firm Sharekhan said in their latest report last week that TCS' strong domain expertise, geographical presence, and ability to cross-sell make it well placed to grab opportunities across cost optimisation, digital transformation and newer technology services.
"TCS’s resilient revenue growth over the last several quarters is expected to pick up, given the ramp-up of large deal wins over financial year 2025/26 in addition to demand recovery across key verticals, including BFSI (banking, financial services and insurance), led by mitigating headwinds in calendar 2024 and growing opportunities across newer technology services," the analysts said.
The ramp-up of Jaguar Land Rover, Nest, BSNL and Aviva deals are likely to fuel revenue growth in the medium to long term, added the Sharekhan analysts, who had a target price of Rs 4,750 on the stock.
