11 Merchant Bankers In Fray For Managing Government’s Stake Sale In Tata Communications

As many as 11 merchant bankers, including Goldman Sachs, JM Financial and Axis Capital, are in race for managing the sale of the government's 26.12% stake in Tata Communications Ltd.

The government will sell its entire stake in Tata Communications, erstwhile VSNL, through an offer-for-sale and strategic sale route by March 20, 2021.

The merchant bankers would be making presentations before the officials of the Department of Investment and Public Asset Management on Feb. 9, according to a notice posted on the Dipam website.

The other merchant bankers who are in the fray include ICICI Securities, Credit Suisse Securities, IDBI Capital Markets, Kotak Mahindra Capital, SBI Capital Markets, IIFL Securities, Yes Securities and Elara Capital.

Public sector VSNL was privatised in 2002 by divesting 25% 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.

According to the disinvestment plan of Tata Communications, a part of the government shareholding will be offered through offer-for-sale and the balance, including any leftover portion in the offer-for-sale, will be offered to strategic partner Panatone Finvest.

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

The government has so far this fiscal mopped up Rs 19,499 crore from CPSE disinvestment, compared with the budgeted target of Rs 2.10 lakh crore.