Tech Mahindra plans to sell 12.74m shares

MUMBAI - Tech Mahindra Ltd., a venture between Mahindra & Mahindra Ltd. and UK's BT Group Plc., said on Wednesday it plans to sell 12.74 million shares through an initial public offering.

The issue in India would bring down BT Group's stake in the information technology service provider to 33.95 percent from 38.56 percent now, the firm's chief said.

"The money will be used to set up an additional facility in Pune and expand existing facilities in India," Vineet Nayyar, managing director and chief executive officer told reporters.

The issue would lead to an equity dilution of 11 percent and help fund the company's expansion at a cost of 3.5 billion rupees in the next 18 months, Nayyar said.

As part of the issue, BT Group would sell 5.73 million shares while Mahindra & Mahindra would sell 3.82 million shares. The company would issue 3.18 million fresh shares.

After the issue, the stake of Mahindra & Mahindra, India's top utility vehicle maker would fall to 45.01 percent from 51.12 percent.

Tech Mahindra has already filed initial papers for the issue with the Indian market regulator, Securities and Exchange Board of India.