New Delhi/Mumbai: Global telecom giant BT Plc Thursday sold 14.1 percent stake in Tech Mahindra to institutional investors for about Rs 1,395 crore and said it would consider further share sale in the Indian IT firm in future.
UK-based BT Group (British Telecommunications Plc) is a co-promoter of Tech Mahindra, with the other being Indian business conglomerate Mahindra and Mahindra Group.
Pursuant to today's transaction, BT group has pared its stake in the Indian IT firm from 23.16 percent to 9.1 percent. In 2010, BT Group had sold 5.5 percent stake in Tech Mahindra to Mahindra and Mahindra (M&M).
The shares were sold through a series of open market transactions at the BSE and NSE today and the deal was managed by global investment bankers JP Morgan and Credit Suisse.
BT sold a total of 17.9 million shares to various institutional investors for total gross cash proceeds of Rs 1,394.9 crore (158.6 million pounds) at an average price of Rs 777.73 per share.
Tech Mahindra shares today settled 5.2 percent down at Rs 792.15 at the BSE, after remaining under pressure for most part of the day. The stock had hit a low of Rs 775 early in morning trade, but managed to recover some lost ground.
"Following this sale, BT has a 9.1 percent shareholding in Tech Mahindra but further sales may be considered in the future," the UK-based company said in a statement after the deal.
"The financial impact of the disposal is expected to be treated as an income statement specific item in BT's next financial results," it added.
The group, however, said that Tech Mahindra remains a key supplier.
A Tech Mahindra spokesperson declined to comment.
BT is one of the world's leading providers of communications services and solutions, serving customers in more than 170 countries.
Investment banking sources said that BT managed to sell more than expected number of shares today, as it was initially targetting to dispose of just 5-10 percent stake as of now and consider further stake sale at a later stage.
Sources have said that BT has been looking at part-sale of its stake in Tech Mahindra for quite some time, but has been waiting for right market conditions to go ahead.
Tech Mahindra shares hit a 52-week high of Rs 887.70 earlier this week on August 27, prompting the investment bankers to plan the share sale for today. They were open to the idea of continuing the sale tomorrow as well, had a right price been not achieved. However, the shares managed to get a price better than earlier expectations for about Rs 760-765.
The Mahindra group is currently in the process of merging its another IT firm Mahindra Satyam with Tech Mahindra. Shares of Mahindra Satyam, which have also gained considerably in the recent past, fell by about 2 per cent at the BSE today.
PTI
