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Shares of Tata Consultancy Services dropped over 3% on Tuesday, as its top shareholder proposed a share sale worth up to 93.62 billion rupees ($1.13 billion) in the Indian IT services company at a discounted rate.

The potential share sale by Tata Sons, the holding company of Tata Group, would be at a floor price of 4,001 rupees apiece, reflecting a 3.7% discount to its closing price of 4,152.5 rupees on Monday, as per a term sheet.

TCS was currently down 3.2% at 4,018.70 rupees, leading losses on the blue-chip Nifty 50 index, which slid 0.9%. additionally, the stock's decline dragged the Nifty IT index down 1.8%.

Some TCS shares changed hands in 49 block deals as of 10:50 a.m. IST in a price range of 4,051.25 rupees to 4,014.50 rupees, data from LSEG showed.

"The plan to sell shares through block deals at a discount, which is a normal practice, has led to the share price losing significant ground," said Arun Kejriwal, the founder of Kejriwal Research & Investment Services.

The share price is expected to hover around the average price at which the shares would be offloaded, he added.

More than 6 million TCS shares have been traded so far, marking its busiest session since Jan. 12.

"The move will lead to an increase in the free float of the stock, with approximate inflows of $120 million to $130 million due to the rise in weightage in various indexes such as Nifty and FTSE," Ajay Bodke, an independent market analyst, said.