Will Tata Group Sell TCS Stake To Raise Money? Shares Prices Crash On Speculations

Despite the slowdown due to coronavirus, and lockdowns, IT companies in India have delivered a stable output, and it has directly reflected in the share prices of these companies.

Due to robust growth projections and optimism, share prices of all major IT firms such as Infosys, HCL, TCS, Wipro has shown excellent results, and the prices are going up.

However, despite good financial results, share prices of TCS is wobbling since last few days, and the reason is not performance of the company, but a rumor that Tata Group can sell a stake in TCS to raise money.

TCS Share Prices Going Down Since Last Few Days

If we observe the share prices of TCS, then there is a downward trend, and the investors are shaky.

Here are the share prices at the share market’s opening time of the respective dates:

September 22:  2491.50

September 23: 2510

September 24: 2410

September 25: 2389.20

As we can see, the share prices are continuing to dip, and had hit the bottom on 2389 on Friday morning. By the end of the day, the share prices showed an upward trend, and closed at 2417, but the manner in which the shares are trading, its clear that investors are worried.

Will Tata Group Sell TCS Stake?

Pallonji Mistry family owns 18.4% stake in the Tata Group, and as per rumors, Tata wants to buy back this share from them.

For that, they will need Rs 1.78 lakh crore, and to raise this money, Tata Group can sell a stake in TCS.

Now, this is only speculations as of now, and nothing confirmed has come out.

But the investors are worrying, because TCS is Tata Group’s cash cow, most successful venture, which consistently provides high returns.

Selling a stake in TCS will be a big loss for the investors.

TCS directly results in 70% of the brand valuation, of Tata Group as a whole, and the rest 30% comes from other Tata brands.

Tata Sons hold 72% stake in TCS.

If TCS stake is indeed diluted to raise funds, then the good performance of TCS shares will stop, and the prices may further go down.

This is a developing story, and we will keep you updated more details come in.