Tata Communications tumbles 7% as OFS to divest govt stake begins

Shares of Tata Communications, earlier state-owned VSNL, were down 7 per cent at Rs 1,206 on the BSE in intra-day trade on Tuesday as offer for sale (OFS) to divest the government holding in the company opened today for institutional investors.

The government will sell its 10 per cent stake, with an option to sell an additional 6.12 per cent stake in As of December 31, 2020, the government held a 26.12 per cent stake in alternative carriers company through the President of India, the shareholding pattern data shows.

The floor price has been set at Rs 1,161, and the sale of 16.12 per cent stake could fetch the government around Rs 5,334 crore. The offer would open for retail investors on Wednesday.

On Friday, had said that: “As an initial step, the government will sell up to 4,59,46,885 equity shares forming 16.12 per cent equity shareholding of the company through an OFS through the stock exchange mechanism. Immediately after the OFS, the government shall sell the remaining equity shares held by it in the company to Panatone.”

Panatone Finvest is an investment arm of Tata Sons. The price at which the stake would be sold to Panatone would be decided based on the price and number of shares sold in the OFS.

The government, Panatone, Tata Sons and the company have entered into an Amendment Agreement with regard to amending the Shareholders’ Agreement dated February 13, 2002 which was entered into at the time of disinvestment by the government in 2002 between inter alia, the government and Panatone and to record the terms and conditions for the transfer of the agreed percentage of shares of the company held by the government to Panatone, the company said.

In the past one year, the stock of has outperformed the market by zooming 387 per cent as compared to a 62 per cent rise in the S&P BSE Sensex. The stock hit an all-time high of Rs 1,365 on March 8, 2021.

At 11:28 am, Tata Communications was trading 5 per cent lower at Rs 1,237 as against a 0.56 per cent gain in the benchmark index. A combined 3.02 million equity shares had changed hands on the counter on the NSE and BSE so far.

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