Shapoorji Pallonji Group (SPG) has sold 19.5 lakh shares in India’s IT giant and one of the stock markets most valued companies, Tata Consultancy Services (TCS), in a block deal done on Thursday.
The block deal is the second tranche of sale done by Shapoorji Pallonji in TCS this month alone. On December 5, Shapoorji Pallonji, via its holding company, sold 19.9 lakh shares of TCS. The move led to the fundraising of Rs 400 crore.
Before the first block deal, Shapoorji Pallonji held 74.45 lakh shares in TCS. Post both block deals, Shapoorji Pallonji now holds 34.05 lakh shares in TCS.
When contacted Shapoorji Pallonji responded to CNBC-TV18 exclusively. "Shapoorji Paloonji sold some shares of TCS today with a view to strengthening the balance sheet," a spokesperson of the company said.
Sources privy to the developments told CNBC-TV18 that with both the tranches, the group raised up to Rs 750-800 crore, "The amount will be used entirely to bring down Sterling & Wilson's debt. Given the history between Shapoorji Pallonji and the Tata Group, in normal circumstances, SPG would not have sold a stock like TCS but it will add fairly significantly to Sterling & Wilson solar's debt repayment."
The Sterling & Wilson solar stock has been in focus after the promoters failed to repay lenders as committed to in its initial public offer. As a result of that, the SPG has sought more time from the company’s board, in August, to repay loans worth Rs 2,341 crore citing unforeseen reasons including a liquidity crisis at the group level.
In a filing to the stock exchanges, the promoters stated that they had requested the board of directors to consider a revised repayment schedule for the balance outstanding amount which was reduced to Rs 2,341 crore (principal amount of Rs 2,085 crore and interest is Rs 256 crore) as on September 30, 2019, due to the significant and rapid deterioration in the credit markets creating a significant liquidity crisis, all of which was unforeseeable and coupled with the lesser than expected realisation from the IPO.
The statement further said, "The promoters further stated in the letter that SPCPL will endeavour to reduce the outstanding loan by Rs 1,000 crore from the level as of the date of listing, by December 31, 2019."
On December 12, the TCS stock fell in the last hour of trade at the back of the block deal, whereas the stock of Sterling & Wilson solar closed in the green.