Tata Motors, Tata Chemicals, Tata Global Beverages shares jump after block deals

Mumbai: Three Tata Group companies—Tata Motors Ltd, Tata Chemicals Ltd and Tata Global Beverages Ltd—witnessed a series of block deals on Tuesday, in which a combined 86 million shares changed hands. However, details of buyers and sellers were not available.

Around 32.35 million shares or 1.12% stake of Tata Motors, 10.50 million or 4.1% stake of Tata Chemicals Ltd and 43.20 million or 6.8% stake of Tata Global Beverages Ltd changed hands in various block deals, Bloomberg reported.

According to the report, Tata Sons is planning to increase its stake in Tata Motors.

Shares of Tata Motors opened sharply higher after Mint reported on 18 September that the company was selling shares equivalent to around 1.7% stake at 4% premium to undisclosed buyers. The total value of the deal is estimated at Rs2,000 crore and Citibank is the sole adviser for the share sale, the report said.

On 12 September, Tata Group said in a notice to exchanges that Tata Sons will raise its stake in Tata Global Beverages and Tata Chemicals by up to 6.84% and 4.39%, respectively.

The move is part of a larger strategy adopted by Tata Sons chairman N. Chandrasekaran to disentangle cross-holdings of group companies and simplify structures, the exchange notice said.

The value of the acquisitions is estimated at Rs1,458 crore. Tata Sons will buy as many as 43.1 million shares, or a 6.84% stake, in Tata Global from Tata Chemicals as part of the restructuring. Tata Chemicals said Tata Sons will acquire up to 11.1 million shares, or a 4.39% stake, in the company from Tata Global.

Earlier, Mint had reported that Tata Sons’s shareholders are scheduled to vote on 21 September to change its legal status to a private company rather than a public company which will restrict the Mistry family’s ability to sell its stake to external investors. The Mistry family is planning to vote against the move.

As of June 2017, Tata Sons holds 31.6%, 19.35% and 23.5% stake in Tata Motors, Tata Chemicals and Tata Global Beverages, respectively.

Tata Motors surged over 4% to Rs421.55, Tata Chemicals gained 0.5% to Rs646, while Tata Global Beverages rose 1.6% to Rs216.75, in morning trade. India’s benchmark Sensex Index fell 0.01% to 32,422.36 points.