Tata Communications share price fell over 6 percent intraday on March 16. The offer for sale (OFS) of the Government of India's equity in Tata Communications Ltd (TCL) will open on March 16, said the Union Ministry of Communication and Information Technology in a regulatory filing on March 15.
The central government would divest 10 percent shares in TCL, along with an "additional 6.12 percent as Green Shoe Option", said the official Twitter handle of Secretary, Department of Investment and Public Asset Management (DIPAM).
The offer for sale would be available only for non-retail investors on March 16. The retail investors would be allowed to bid for the government stake on March 17, which is the second day of the sale.
Currently, the government holds 26.12 percent stake in TCL, while 34.8 percent stake is held by Panatone Finvest Ltd, and 14.07 percent is owned by Tata Sons.
"As an initial step, the government will sell up to 4,59,46,885 equity shares forming 16.12 percent equity shareholding of the company through an offer-for-sale (OFS) through the stock exchange mechanism," TCL said in a regulatory filing on March 12.
TCL, formerly known as Videsh Sanchar Nigam Limited (VSNL), was established as a central public sector undertaking in 1986. In 2002, the government divested its 25 percent stake along with transfer of management control to Panatone Finvest Ltd. Following the strategic disinvestment, the company's name was changed to Tata Communications Ltd.
The stock was trading at Rs 1,220.00, down Rs 77.30, or 5.96 percent at 10:02 hours. It has touched an intraday high of Rs 1,229.70 and an intraday low of Rs 1,206.30.
Global research firm CLSA has maintained a buy call on the stock and has raised the target to Rs 1475 from Rs 1,365 per share earlier. The firm is of the view that growth services are expanding 2x of traditional and forms a 24 percent share. CLSA has revised the target which includes 33 percent of 756 acres of surplus land value, according to a CNBC-TV18 report.
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