Tata Sons, the principal holding company of the $70.80 billion steel-to-software Tata group, has

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hiked its shareholding in Voltas by two per cent over the past one month till June 3.

Tata Sons spent Rs 117.59 crore to buying 66.18 lakh Voltas shares from the open market as per a disclosure to the Bombay Stock Exchange by Voltas on Wednesday. After the purchase, Tata Sons’ shareholding in the engineering solutions company will rise from 23.79 per cent to 25.79 per cent. As of March end, the total promoter shareholding in Voltas stood at 27.68 per cent. Voltas crossed the $1 billion turnover mark recently.

Factoring in the additional purchases by Tata Sons, Tata group’s shareholding in the venture would have risen to 29.68 per cent.

A top Tata group official told Financial Chronicle that the promoters were bullish on the company and could consolidate their stake further. “Tatas have an internal target of keeping their shareholding in excess of 30 per cent in the key listed group companies. The stake buy is in line with this policy. Taken together with institutional shareholding and the widely dispersed public shareholding, it would be difficult for anyone to mount a hostile bid for the company,” said the official. “In the past Tata has publicly said that our shareholding in group companies is quite low and we would like to increase it. The stake hike is in line with our strategy. Since the company itself doesn’t really need the money due to a very good cash flow. Hence, an open market purchase of shares was resorted to,” another top Tata official said. Stock market experts said such stake hikes show promoters’ confidence in the company. Jagannadham Thunuguntla, equity head of New Delhi-based SMC Capitals, said the promoter group probably felt that its holding is small and might have wanted to ramp it up.

“Voltas is playing on twin developments. One is the revival in electro-mechanical projects and domestic HVAC (high voltage air-conditioning) industry’s progression towards integrated electro-mechanical plumbing play. Further, Voltas being a serious player in room air-conditioners, it will benefit from over 25 per cent industry growth estimated over the next two financial years,” Pritesh Chheda, an analyst with Emkay Global Financial Services, said in a note to clients.

Voltas is one of the few companies in the group, which do not carry the Tata cachet in their name. It is also one of the few firms whose board is graced by Noel Naval Tata, the half brother of Tata group chairman Ratan Naval Tata.

The company has set for itself an ambitious growth target to reach a turnover of Rs 10,000 crore — more than double its present size, and has undergone a massive restructuring and management change to fasttrack growth.