Tata Sons is looking to hike stake in group companies, reports CNBC-TV18

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RAJESH DESAI

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Aug 22, 2012, 7:40:06 AM8/22/12

Sources indicate that Tata Sons is looking to hike stake in group companies, reports CNBC-TV18's Kritika Saxena.

The reason simply could be the fact that valuations are low and equities are genuinely coming at a lower price at this point in time. Sources say that by end of calendar year 2013, Tata Sons is actively looking at hiking stake in several group companies.

Now, four-five companies are top most on the agenda. This includes Tata Chemicals , Tata Steel , Indian Hotels and Tata Coffee . Sources say that Tata Coffee is expected to see a stake hike from promoters from 57% to 65%. In the case of Tata Steel, Tata Sons may hike stake by around 10%.

Tata Sons has been gradually hiking stake in Indian Hotels. They aim to take their shareholding in Indian Hotels from 37% to atleast 50%.

In the case of Tata Chemicals, they have a very low holding of around 31%. So, they are expecting to increase it to 38% and then eventually take it to 50% over a gradual period of time. So, the aim is to strengthen the promoter holding in all the group companies.

Aside from that, Tata Investments is actively going to be shelling out capital in order to ensure that all these group holding companies are able to grow and expand in terms of inorganic and organic growth. Around end of CY13 is the timeline.

There could be three large modes, open market transaction, warranty conversion and ofcourse preferential share.