Tata Sons sells over 2 crore TCS shares in block deals; tech major's stock trades lower

Tata Sons, the investment arm of the Tata Group has likely sold over 2 crore shares of Tata Consultancy Services or TCS through block deals.

The sale constitutes over 0.6% of TCS' total outstanding equity. As per exchange data, Tata Sons currently holds a substantial 72.4% stake in TCS.

Tata Sons to reduce debt

Reports, quoting Tata Group sources say that the share sale worth over ₹9,000 crore will help Tata Sons reduce its debt level. Tata Sons' efforts to cut its debt is being seen as a move aimed at avoinding an IPO, as manadated by the RBI rules.

TCS share price

TCS slipped in trade after this block deal where shares sold at ₹4,043 each, slightly lower than Monday's closing price of ₹4,152.5. JP Morgan and Citigroup handled the transaction.

Market sentiment 'optimstic'

Market sentiment towards TCS remains optimistic, with UBS recently issuing a 'buy' recommendation and revising the target price upwards. The brokerage highlighted TCS' potential for superior revenue growth, driven by factors such as large deal ramp-ups, revival in the BFSI segment, and increased cloud and discretionary spending.

What are block deals

Block deals, wherein large volumes of shares are transacted in a single transaction, have gained prominence in recent times. Notably, several major shareholders in prominent Indian companies, including ITC, Paytm, and Zomato, have utilized this mechanism for divestment purposes.