Options before Tatas: Raise debt by pledging TCS shares or dilute stake

Fresh borrowings will push Tata Group's total debt by 50%; stake-sale in TCS will reduce Tata Sons' earnings and cash flow

There are several options before Tata Group to raise funds to buy out Mistry family’s 18.37-per cent stake in its holding company, Tata Sons. These include buying back Mistrys’ stake by raising debt through pledging Tata Group shares or selling part of Tata Consultancy Services’ (TCS’) stake.

While the final valuation is yet to be negotiated, bankers said the Tatas can raise $20 billion by selling 5-8 per cent stake in TCS, selling some group businesses like Tata Capital and insurance venture stakes and/or ask sovereign wealth funds to buy out Mistrys’ stake with a buyback option to the Tatas after