As news surfaced about Tata Sons planning to sell part of its stake in Tata Consultancy Services (TCS) to raise over a billion dollars, the share price of the Indian IT giant faced selling pressure during Tuesday morning trading. Today, TCS shares opened lower and dropped around 3%, touching an intraday low of ₹4,022 per share on the NSE, compared to the previous session’s closing price of ₹4,152.50 per share.
Stock market analysts attribute today’s decline in TCS share price to Tata Sons’ stake sale. However, they note that this news will only affect TCS in the short term, as the stake sale represents only 0.65% of the company’s total paid-up capital and won’t significantly impact its financials. They recommend medium to long-term investors to seize this opportunity, as the outlook for TCS share price appears highly favorable.
Should I buy this stock today?
Explaining the drop in TCS share price today, Saurabh Jain, Vice President — Research at SMC Global Securities, stated, “The decline in TCS shares is due to Tata Sons’ plan to sell its stake. However, I don’t think this stake sale will affect TCS financially. With TCS securing significant deals in the US and European markets, I see it as a chance for bargain hunting.
Medium to long-term investors should consider increasing their TCS holdings, while new investors could add TCS shares to their portfolios during this market correction.
Anticipating a rebound in TCS shares, Sumeet Bagadia, Executive Director at Choice Broking, remarked, “TCS share price shows positive signs based on chart patterns. The stock has significant support at ₹3,950, and in the short term, it’s expected to reach levels of ₹4,250 and ₹4,400 per share.”
News about TCS
Tata Sons is preparing to raise over a billion dollars by selling part of its stake in Tata Consultancy Services as it explores new sectors like semiconductors, e-commerce, and phone assembly. The Tata group’s holding company plans to sell up to 23.4 million shares, equivalent to a 0.65% stake in TCS, through block deals. This move aims to raise ₹9,362.3 crore ($1.12 billion).
Currently, Tata Sons holds about 72.4% of TCS, India’s second most valuable firm. The shares will be offered at a base price of ₹4,001 each, representing a 3.65% discount from TCS’s closing price of ₹4,152.50 on Monday on the National Stock Exchange (NSE). After this sale, Tata Sons’ ownership in TCS is expected to decrease to approximately 71.7%.
What’s causing the attention on Tata Group stocks this month?
Tata Group stocks have garnered attention this March due to speculation from Spark Capital about a potential listing of Tata Sons by September 2025. The Reserve Bank of India (RBI) requires upper-layer NBFCs, like Tata Sons, to list within three years of notification. Tata Sons received this notification in September 2022 and oversees 29 publicly listed Tata Group companies with a total market capitalization of ₹31.6 lakh crore.
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