TVS Motor promoters likely to sell stake via block deals this month

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The promoters of automobile major TVS Motor are likely to sell stake in the firm via block deals this month, CNBC TV18 reported, citing sources, on February 11.

Sundaram Clayton, the listed auto component manufacturing arm of the $8.5 billion TVS Group, is likely to sell two percent of its stake in the company, the news channel said.

Sundaram Clayton would be offloading shares worth Rs 600 crore, the report said, adding that the entire stake sale exercise is part of TVS Group's restructuring plans.

Notably, Sundaram Clayton currently holds 52.3 percent stake in TVS Motor. The company had, in June 2021, raised Rs 1,500 crore by selling around 5 percent of its stake via block deals.

Sundaram Clayton was yet to react to the CNBC TV18 report which claimed that the company could be offloading another two percent of its stake in TVS Motor.

In a stock exchange filing on February 9, the firm said it has proposed to reorganise and segregate the businesses of manufacturing non-ferrous gravity and pressure die castings from its other businesses, according to a stock exchange disclosure.

According to the Sundaram Clayton website, the company is a leading supplier of aluminium die castings to the automotive and non-automotive sector.

As part of the overall restructuring exercise, it is also proposed to consolidate promoter holding entities with the company by way of merger," the regulatory filing added.

“Pursuant to the said consolidation, the promoters of the company will effectively surrender their non-convertible redeemable preference shares held in lieu of the monetary obligations of the promoter companies,” the announcement elaborated.

Also Read | Sundaram Finance Holdings sells Sundaram Clayton stake for Rs 127 crore

According to the company, the exercise would efficiently streamline the promoter holding structure, bring diverse trading businesses from the promoter entities into the company and will also reduce the administrative, legal and regulatory responsibilities and consequential costs.

The turnover of the demerged division as on March 31, 2021, was Rs 1,176.91  crore, representing 92.59 percent of the total turnover of the company in the financial year ending March 31, 2021.