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In a move to reduce crossholdings among group companies , Tata Sons, the holding company of the $103-billion Tata group, will acquire Tata Steel’s 2.85 per cent share in Tata Motors on or after June 23, the company said in the notice to the exchanges on Saturday.
Tata Sons, currently having 28.2 per cent share in Tata Motors, will purchase around 83.6 million shares in the company, taking its share to 31.06 per cent. The reason, cited by the company, is "restructuring of investment portfolio".
The price at which Tata Sons will acquire the stock, according to the regulatory filing, would not be more than 25 per cent of the estimated cost of the stock at Rs 457.35 per share (weighted average market price for a period of 60 trading days preceding the date of issuance of the notice). On Friday, Tata Motors shares closed at Rs 455.5 on BSE.
Earlier in May, a Kotak Institutional Equities note said a reduction in crossholdings within the Tata Group will result in unlocking of value for listed entities, benefiting companies like Tata Power, Tata Chemicals, Tata Global and Tata Motors by allowing them to lower debt and interest expenses.
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