Posts Tagged ‘tata motors’
Daimler to sell Tata Motors stake
MUMBAI: German auto major Daimler,which holds a 5.34% stake in Indian automobile giant Tata Motors, is soonexpected to sell its entire stake, consisting of nearly 2.56 crore shares. Atthe current market price, Daimler’s stake is valued at about Rs 2,050 crore(nearly $450 million).
however, institutional broking sources saidDaimler is planning to sell the shares at some discount to the current marketprice. on Monday, Tata Motors shares on the BSE ended at Rs 797, marginally up0.2% over Friday’s closing price.
Market sources pegged the pricediscount between 4-7%, i.e. in a range of Rs 737 and Rs 761 per share. At theupper end of the price band, the total deal could be worth nearly Rs 1,950 crore(about $427 million). Citigroup was handling the issue. A Daimler officialdeclined to comment on the reported share sale and a Tata Motors spokeswoman didnot offer any comment.
Like in several such recent deals, this wouldalso take the block deal route on the bourses, institutional dealers said. Thisis because deals done through the bourses qualify for capital gains tax whileoff-market deals lead to substantial tax outgo for the seller. Over the last fewmonths, among the notable block deals, huge chunks of Reliance Industriesstocks, from its treasury, were sold through the block deal route. A substantialchunk of DLF’s promoters’ holdings were also offloaded through block deals. Inboth instances, all buyers were institutional investors.
As ofDecember 2009, Daimler held 5.34% of Tata Motors’ ordinary shares, making it thethird-largest shareholder in the company. The promoters now hold nearly 25%while Life Insurance Corporation has 11.2% in the company.
Over thelast six trading sessions, i.e. since the Budget proposals were announced, theTata Motors stock has risen 19%. while budget proposals relating to theautomobile sector were according to investor expectations, the same day thecompany had also announced its consolidated financial numbers which showedsubstantial improvements in its Jaguar and Land Rover unit.