Tata Steel Ltd, India’s largest steel company by revenues, has sold just under half of its stake in the group’s automobile company Tata Motors Ltd to holding company Tata Sons and others for Rs 2500.68 crore ($379 million), it said on Friday.
The company divested 38.5 million shares to institutional investors at around Rs 324.68 each aggregating Rs 1,250.69 crore and another 37.8 million to the group holding firm Tata Sons for Rs 1,249.99 crore at Rs 330 per share. Bulk of the stake sold to institutional investors was picked by a portfolio management entity under Citigroup.
The firm held 5.5 per cent stake in the company and has sold 2.6 per cent through the mix of open- and off-market transactions.
Its remaining stake is worth Rs 2,750 crore.
Tata Sons already directly owned 25.67 per cent stake in Tata Motors and post this deal it would own close to 27 per cent in India’s top commercial vehicles maker and owner of the iconic luxury car brand Jaguar.
The move will free up cash for Tata Steel while partly cutting the group cross holdings. The overall promoter holding in Tata Motors is 34.35 per cent of which around a quarter is held by other group entities.
The group has been looking to bring down the cross holdings over the last few years. Last month, Tata Sons acquired Tata Steel’s holding in Titan.