Tata Communications plunges 6% as government looks to sell entire 26% stake

Tata Communications plunges 6% as government looks to sell entire 26% stake

NEW DELHI: Tata Communications Ltd (TCL) shares fell 6 per cent in Wednesday’s trade after the government said it would sell its entire 26.12 per cent stake in the telecom company, erstwhile Videsh Sanchar Nigam Ltd (VSNL). The government will offload its stake in the ongoing financial year, through offer for sale and strategic sale routes.

The stock fell 6.13 per cent to hit a low of Rs 1,060.60 on BSE. The 26.12 per cent stake in the firm fetched the exchequer around Rs 8,400 crore.

In a notice, the Department of Investment and Public Asset Management (DIPAM) said a part of the shareholding will be offered through OFS and the balance, including any leftover portion in the OFS, will be offered to strategic partner Panatone Finvest Limited. The transaction is to be completed by March 20, 2021, the DIPAM said.

Public sector VSNL was privatised in the year 2002 by disinvesting 25 per cent shareholding along with transfer of management control to Panatone Finvest Ltd, the strategic partner. Subsequent to the strategic disinvestment, the name of the company was changed to Tata Communications Ltd.

“The GoI (Government of India) intends to disinvest its entire shareholding of 26.12 per cent paid up equity capital of TCL, through Offer for Sale (OFS) method of shares by promoters through the stock exchanges and thereafter to the Strategic Partner,” the DIPAM said.

Panatone Finvest would be “obliged to buy the offered shares” at the OFS discovered price, it said.

As per the shareholding pattern of Tata Communications, the promoters hold 74.99 per cent in the company. Of this, the Government of India holds 26.12 per cent stake, while Panatone Finvest has 34.80 per cent and Tata Sons 14.07 per cent. The remaining 25.01 per cent is with the public.

The government has mopped up Rs 15,220 crore from disinvestment proceeds so far in the ongoing financial year.

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