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Govt To Sell Its Entire 26.12 Per Cent Stake In Tata Communications, Likely To Garner Around Rs 8,000 Crore
Source: Bloomberg Quint
The Central government will exit from Tata Communications Ltd (TCL) by selling its entire 26.12 per cent stake in the erstwhile Videsh Sanchar Nigam Limited, reports Livemint.
Accordingly, a portion of the shares will be sold via an offer for sale in the stock market while the rest will be sold to the Tatas. The government will receive Rs 8000 crore from the sale which is part of its earnings though divestment in the ongoing financial year.
“Part of the stake will be sold through OFS and on the discovered price, rest of the stake will be sold to the Tatas. Though how much exactly will be sold through OFS has not been decided yet, the Cabinet Committee on Economic Affairs (CCEA) has approved selling up to 16 per cent stake through OFS and remaining to the Tatas,” an officer from the Union Finance Minister was quoted as saying.
The Department of Investment and Public Asset Management (DIPAM) has set 20 March as the deadline to complete this transaction. Proposals have been sought from merchant bankers-cum-selling brokers and 3 February is the final day for submission of bids.
TCL’s consolidated profit after tax shot up by 4.28 per cent to Rs 309 crore in the December quarter. The gradual increase in data consumption amidst the Covid-19 pandemic means that the company’s share price increased by 5.5 per cent over a year’s time.
The divestments of BPCL and Air India have been pushed to the next fiscal and that means the government will fall behind meeting its asset sales target for the second year running.
“The SP (Tatas) had given an open offer at the time of strategic disinvestment in 2002; the present transaction including transfer of shares to the promoters namely the SP, is to be structured in a manner that it does not trigger open offer again,” the DIPAM stated in the bid document.
The department also mentioned that the appointed merchant banker (MB) will advise the government in this regard and also with respect to any exemption required from the Securities and Exchange Board of India (SEBI).
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