Shiv Nadar-led HCL Corporation on Thursday offloaded a 2.5% stake in HCL Technologies to raise funds for philanthropic activities. HCL Corp sold 1.67 crore shares in block deals to raise about Rs 580 crore. HCL said the sale proceeds would go to the Shiv Nadar Foundation. The shares were sold at Rs 347 each on the Bombay Stock Exchange (BSE). Citigroup Inc and Deutsche Bank AG managed the sale.
Reacting on this news, Shares of HCL Technologies plunged 7% to a low of Rs 347 a piece on the Bombay Stock Exchange (BSE) in morning trade. However, the scrip latter recovered to close at Rs 358.85, down 3.9%.
The contribution will make Shiv Nadar, founder of HCL Group and chairman of HCL Technologies, one of the largest philanthropists in India, the company said in a statement. This is the first time that HCL Corp has raised funds for Shiv Nadar Foundation by sale of shares, a company spokesperson told FE.
HCL Corporation, held privately by Shiv Nadar and his family, is a promoter company of HCL Enterprise, which includes two publicly listed companies ? HCL Technologies Ltd and HCL Infosystems. As on March 31, 2010, HCL Corp held 50.27% stake in HCL Technologies and 50.24% in HCL Infosystems as on May 2010.
Debasis Ghosh, a Mumbai-based spokesman at Citigroup, and Deutsche Bank?s Mumbai-based spokesman Linus Chettiar declined to comment. Madhavi Anant, a spokeswoman for HCL, also refused to comment.
The firm clarified the funds raised would be used for education initiatives. The Shiv Nadar Foundation is setting up a university at Greater Noida on 286 acre at an investment of Rs 600 crore. Funds may also be used in expansion of SSN Institutions, the foundation set up in 1996 in Chennai.
HCL has consolidated revenues of over $5 billion and employs 60,000 people. Shiv Nadar started the company in 1976 after quitting his executive job in DCM.