Tata Sons, the holding company of the Rs 49,000 crore Tata group, is acquiring the entire Tata group stake in information technology (IT) arm Tata Elxsi.

It will buy the entire 18.98 per cent held by Tata Industries, the original promoter of Tata Elxsi, at Rs 80 per share. The total outgo for Tata Sons will be over Rs 47 crore.

With this deal, Tata Sons’ stake in Tata Elxsi will increase to over 38 per cent, group executives said. The inter se transfer is critical in its plans to integrate the group IT companies with Tata Consultancy Services at a future date.

As most group IT companies are likely to be merged into TCS, after it is hived off from Tata Sons and listed, the consolidation of group holdings in Tata Sons is important when the mergers happen.

As the IT holdings will be transferred to TCS later, after the merger the cross-holdings will eventually cancel out. This will also lower the extent of future dilution of TCS’ equity.

The other Tata IT companies involved in the plan are Tata Infotech, CMC and Tata Technologies.

Tata Sons also holds over 74 per cent in Tata Infotech, over 68 per cent in CMC, and 50 per cent in another joint venture with Swiss Airlines.

Tata Technologies is a subsidiary of Tata Engineering. The proposed merger will create an infotech giant over 28,000 employees, revenues of almost Rs 5,500 crore and profits exceeding Rs 1,300 crore.

Tata Elxsi shares today opened at Rs 66.95 and closed at Rs 66.60 on the Bombay Stock Exchange. Tata Elxsi has two main operating divisions, the design and development centre and the systems integration operations unit.