Shares of IT major Tech Mahindra plunges 3.41 percent after British Telecommunications said that it may sell part of its stake in the company through an open market transaction to raise an estimated Rs 500 crore.
According to investment bankers involved in the proposed deal, BT may look at selling 5 percent stake, out of its total holding of little over 23 percent, in Tech Mahindra as early as tomorrow morning.
When contacted, Tech Mahindra officials declined to offer any comment on the matter. At the current market price, a stake sale of 5 percent could be worth more than Rs 500 crore. A final call on the stake sale, proposed to be conducted through a block deal, would taken tomorrow after taking into account the market conditions.
Chairman Anand Mahindra and CEO Vineet Nayyar. Reuters
BT might even consider a stake higher than 5 percent if it is able to get a good price in the proposed block deal. The bankers are open to the idea of considering the share sale on Friday if the market conditions are not found to be conducive tomorrow.
The company currently commands a market capitalisation of Rs 10,658 crore and a deal has been proposed by the Mahindras for its merger with the group’s another IT firm Mahindra Satyam.
Sources said that BT has been looking at part-sale of its stake in Tech Mahindra for quite some time, but has been waiting for right market conditions to go ahead.
At the end of last quarter, the total promoter holding in Tech Mahindra stood at 70.78 percent, which included 47.57 percent with Mahindra & Mahindra, 23.16 percent with BT and 0.05 percent with Mahindra BT Investment Company Mauritius.
PTI
