Tata Teleservices (Maharashtra) (TTML) hit an upper circuit limit of 5% at Rs 149.25 after the company said it has decided not to opt for conversion of interest related to adjusted gross revenue (AGR) dues into equity.
TTML on Tuesday said it it took the decision as the interest amount eligible for such conversion has turned out to be far lesser than the company's own calculations.On 11 January 2022, TTML said it would convert interest on AGR dues into equity and had also communicated its decision to the telecom department. Following conversion, it was expected that the government would hold approximately 9.5% of the total outstanding shares of TTML at about Rs 41.50 per share.
After the last month's announcement, shares of TTML hit lower circuits in the past 14 consecutive sessions to correct over 51%.
However, the Department of Telecommunications ("DoT") in response informed the company that the NPV (net present value) of the interest which is eligible for conversion into equity is only Rs 195.22 crore as against the company's calculation of Rs 850 crore.
"As the interest amount eligible for conversion is much lesser than as expected and calculated by the Company, the Board of Directors of the Company, in its meeting held on February 1, 2022 has decided to withdraw the desire expressed for conversion and inform DoT that the Company is not desirous of opting for conversion of interest into equity," TTML said in a statement on Tuesday.
Last year, DoT had provided various options to telcos in connection with Telecom Reforms Package. It offered a one-time opportunity to opt for deferment of AGR related dues as determined by the Supreme Court in the AGR case, by a period of 4 years with immediate effect. It also offered a one-time opportunity to exercise the option of paying interest for the 4 years of deferment on the deferred AGR dues by way of conversion into equity of the NPV of such interest amount.
TTML reported net loss of Rs 313.63 crore in Q2 September 2021 as against net loss of Rs 341.19 crore in Q2 September 2020. Net sales rose 4.72% to Rs 268.77 crore in Q2 September 2021 over Q2 September 2020.
TTML is a leading player in the connectivity and communication solutions market serving enterprise customers. With services ranging from connectivity, collaboration, cloud, security, IoT and marketing solutions, it offers a comprehensive portfolio of ICT services for businesses in India under the brand name Tata Tele Business Services (TTBS).
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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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