Mumbai: Tata Teleservices Maharashtra Ltd (TTML) shares on Monday surged over 100% in the last 12 trading sessions and hit a near four-month high on Monday on the back of higher volumes.
The stock has hit the upper circuit in the last 12 consecutive sessions, after Bharti Airtel and Tata group announced an agreement to merge their mobile operations.
In morning trade, the stock touched a high of Rs8.22 on the BSE, up 5% from its previous close. Since 12 October till date, TTML has gained 104%, and so far this year, it is up 36.54%.
Airtel will acquire TTML’s assets on a debt-free, cash-free basis, but will assume Rs2,000 crore of Rs10,000 crore of the unpaid spectrum fees that the Tata group owes to the Department of Telecommunication. All other liabilities and dues will be settled by the Tata group, both companies said in a notice to exchanges on 12 October.
TTML had a subscriber base of 44 million and revenue market share (RMS) of 5% at the end of the June quarter. With the merger, Airtel’s overall subscriber base is now expected to increase to as much as 351 million as against the combined Vodafone-Idea’s projected 391 million consumer base.
“The acquisition will strengthen Bharti’s spectrum holdings and add around 40 million subscribers to the company’s leading market position in India’s highly competitive mobile telecommunications market, a credit positive,” said Annalisa Di Chiara, a Moody’s vice-president and senior credit officer in a 16 October note.
According to Kotak Securities, the combined net debt of Tata Teleservices Ltd (TTSL) and TTML stood at nearly Rs40,000 crore at end-FY2017. So far, TTML has reported losses in 59 out of 60 quarters and as of March 2017, according to Capitaline database.