According to senior Tata Power officials, the company had submitted its EoI and was keen on seeing the buyback through. When we received the letter informing us of Tata Sons intention to conduct the buyback, we responded with our EoI, since we are extremely keen on such a move, the officials said.
They added, It would be too early to estimate what quantity of shares they would want us to tender, since it depends on other stakeholders as well. If others dont want to tender in the maximum amount, it leaves room for us to tender more or less.
The officials, however, said that Tata Sons had only indicated its intention to conduct the buyback, but had not responded to Tata Powers EoI yet.
Tata Powers shareholding in Tata Sons is at 4,572 shares or 0.48 per cent. Market analysts have estimated the impact of the buyback in Tata Powers balance sheet as other income of about Rs 60-80 crore.
The last traded share price of Tata Sons was at Rs 7.2 lakh per share (face value: Rs 1,000) on December 14, 2001.
This was an appreciation of 620 per cent between 1996 and 2001, since in the 1996 rights issue, a Tata Sons share was valued at Rs 1 lakh.
Tata Sons, the holding company of the Rs 40,000-crore Tata Group, has planned a major buyback of its equity shares of up to 10 per cent of its subscribed equity capital. The buyback is to precede the hive-off of Tata Consultancy Services (TCS) and its subsequent public offering, which is expected to take place in mid-2003.
Listed Tata companies hold 12.77 per cent stake in Tata Sons, of which Tata Power holds 4,572 shares, Indian Hotels 4,500, and Tata Tea 1,755. Tata Engineering and Tata Steel, through the wholly-owned subsidiary Kalimati Investments holds 12,375 shares.