Photographer: Chris Ratcliffe/Bloomberg

Tata Is Boosting Carmaker Stake in $312 Million Deal, Source Says

Tata Sons Ltd. is buying as much as 20 billion rupees ($311 million) of Tata Motors Ltd. shares, as India’s biggest conglomerate seeks greater control of the Jaguar Land Rover owner, a person with knowledge of the matter said.

Tata Sons is the undisclosed purchaser seeking to buy stock equivalent to 1.7 percent of the company in a deal launched Monday evening, said the person, who asked not to be identified because the details are private. The investor was offering to purchase Tata Motors shares for as much as 421.56 rupees apiece, according to terms for the deal obtained by Bloomberg.

Tata Motors shares rose 4.6 percent to close at 423.65 rupees in Mumbai trading. About 32.35 million shares of the company changed hands in a block trade Tuesday morning.

The conglomerate is aiming to boost its ownership over time in five of its largest businesses, including Tata Motors and Tata Steel Ltd., to protect group companies from potential takeover threats, people with knowledge of the matter said in January. Tata Sons bought an additional 1.7 percent stake in Tata Motors before a December shareholder meeting called to remove the automaker’s then chairman, Cyrus Mistry, from its board.

Citigroup Inc. is managing the purchase of Tata Motors shares, Monday’s terms show. The maximum price offered represents a 4 percent premium to the stock’s last close on the BSE. Under Indian regulations, Tata Group can buy as much as a 5 percent additional stake each financial year without triggering an open offer.

Tata Group controlled 34.7 percent of the automaker at the end of June, including shares held through Tata Sons, according to stock exchange filings.

Tata Sons also bought the inter-company stake holdings of other group companies. Tata Global Beverages Ltd. sold 4.11 percent of Tata Chemicals Ltd. to Tata Sons, while Tata Chemicals sold 43.17 million shares of Tata Global to Tata Sons, according to stock exchange filings.

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