Buoyed by the success of the initial public offering of Maruti Udyog, the Union government is planning to use the book-built route for offloading its residual 26 per cent stake in divested software company CMC, now controlled by the Tatas.
The move is, however, subject to the approval of the Tata group, which holds a stake of over 65 per in the company.
The Tatas till now have remained non-committal on buying the government stake when it decides to exercise the put option. "There have been no discussions between the two sides on the issue of the sale of the residual stake," senior Tata group sources said.
It is not clear at this stage whether the government intends to divest its stake entire stake in CMC or only a part of it. The CMC stock is currently ruling at the Rs 435 levels as compared with Rs 197 at the time of the divestment.
"The Union government is thinking in terms of using the book-built process for divesting its stake. However, the entire process is subject to the shareholders agreement between the two sides," CMC CEO and managing director S S Ghosh confirmed.
The shareholders agreement clearly stipulates that the first right of refusal for the stake vests with the Tata group. Further, the agreement also says that the group can either buy the stake at Rs 197 a share (the price at which the stake was acquired from the government) or the fair market price, whichever is higher.
Analysts say that the Tatas could be keen on exercising their first right of refusal, as there was wide integration of operations between software powerhouse Tata Consultancy Services and CMC. Consequently, it made sense for the Tata group to hike its stake further.
