As part of restructuring its investment portfolio, Tata Sons will acquire additional shares from the open market anytime on or after March 13, 2018
Tata Sons will invest at least Rs 1,077 crore to hike its stake in the BSE-listed hospitality arm The Indian Hotels Co Ltd (IHCL) that owns and operates 98 hotels in 61 locations across the globe. The principal shareholder and promoter of various Tata Group companies, Tata Sons will acquire 7.89 crore shares representing 6.64% stake in IHCL thereby taking its overall shareholding in the hospitality firm to 36.43%.
DNA Money had, in December 2016, reported the possibility of Tata Sons planning a stake hike in various listed group companies amid a raging corporate war with former chairman and director Cyrus P Mistry.
As part of restructuring its investment portfolio, Tata Sons will acquire additional shares from the open market anytime on or after March 13, 2018. The shares will mainly be bought from three entities viz Sir Dorabji Tata Trust (up to 502,21,040 shares), Lady Tata Memorial Trust (up to 177,28,200 shares) and Sir Ratan Tata Trust (up to 110,23,220 shares).
According to a Tata Sons statement, those many shares were held by the three entities as on March 31, 2017, which also means that the three entities are likely to completely exit their shareholding in IHCL post the completion of this share purchase exercise.
The shares will be acquired at or around the prevailing price on the date of the proposed acquisition. However, according to Tata Sons, the acquisition price will not be higher by more than 25% of Rs 136.36 per share.
According to Tata Sons, it arrived at the said price after taking into account the volume weighted average market price for a period of 60 trading days preceding the date of issuing the notice to the stock exchange. IHCL shares closed 0.30% down at Rs 133.75 on Tuesday (March 06, 2018) as compared to a previous close of Rs 134.15 after reaching an intra-day high of Rs 136.80 a piece.
IHCL's market capitalisation at the end of the trading session on Tuesday stood at Rs 15,906.33 crore. The company operates hotels under 'Taj', 'Vivanta', 'Gateway' and 'Ginger' (through subsidiary Roots Corporation Ltd) brands.
In August 2017, under Tata sons chairman Natarajan Chandrasekaran, the IHCL board had brought on board Puneet Chhatwal as its new managing director and chief executive officer after Rakesh Sarna (a confidante of ousted Tata Sons chairman Cyrus Mistry) resigned from IHCL in May 2017.
Sarna had, in February 2017, decided to migrate all the 'Vivanta' and 'Gateway' branded hotels to a single brand i.e. 'Taj'. However, the said decision was reversed a year later by Chhatwal with IHCL going back to its multi-brand approach to addressing the various consumer segments of the hospitality market.
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