BT Group, the UK-based telecommunications firm, has exited Indian outsourcer Tech Mahindra by selling its remaining 9.1 per cent stake for Rs 1,011.4 crore.
The company raised total cash proceeds of £115.7 million by selling about 11.6 million shares in Tech Mahindra to institutional investors at Rs 871 a share, BT said in a statement. Tech Mahindra will continue to remain a key supplier to BT, it added.
Shares in Tech Mahindra closed up 3.69 per cent at Rs 910.80 on the BSE, which was down 0.16 per cent on Wednesday.
“This was much on the expected lines. BT was looking at selling the stake for quite sometime. This is good for Tech Mahindra stocks, as BT’s exit plans were an overhang on Tech Mahindra stocks,” Ankita Somani, research analyst (IT and Telecom) at Angel Broking.
“Tech Mahindra gets 35 per cent of its business from BT, even though it has been scaled from the 63-65 per cent about three to five years, and I think, this should continue,” she added.
In August, BT Group had sold a 14.1 per cent stake in Tech Mahindra, raising about $250.7 million. It has said it intends to sell further stake in Tech Mahindra, but did not disclose further details then.
BT Group was previously the biggest customer of Tech Mahindra, but the company has been selling down its stake in phases in recent years to reduce debt.
Tech Mahindra was formulated as a joint venture between Mahindra Group and BT Group plc, with each holding 44 per cent and 39 per cent, respectively.
After the Satyam scandal, Tech Mahindra had bid for Satyam Computer Services and acquired it. Early this year, the boards of Tech Mahindra and Mahindra Satyam approved a merger of the companies.
The merger is expected to take place in the second half of the year.