Govt to exit its holding in VSNL, sell 26.12% stake for Rs 8,400 cr

Tata Communications

The government will sell its entire 26.12 per cent stake in Tata Communications Ltd (TCL), erstwhile VSNL, through offer for sale and strategic sale route in the current fiscal.

In a notice, the Department of Investment and Public Asset Management (DIPAM) said a part of the shareholding will be offered through OFS and the balance, including any leftover portion in the OFS, will be offered to strategic partner Panatone Finvest Limited.

The transaction is to be completed by March 20, 2021, the DIPAM said.

Shares of Tata Communications closed at Rs 1,129.95, up 1.08 per cent over previous close on the BSE.

At the current market price, 26.12 per cent stake in the firm would fetch the exchequer around Rs 8,400 crore.

Public sector VSNL was privatised in the year 2002 by disinvesting 25 per cent 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 Ltd (TCL).

"The GoI (Government of India) intends to disinvest its entire shareholding of 26.12 per cent paid up equity capital of TCL, through Offer for Sale (OFS) method of shares by promoters through the stock exchanges and thereafter to the Strategic Partner," the DIPAM said.

Panatone Finvest Ltd would be "obliged to buy the offered shares" at the OFS discovered price, it said.

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

The government has mopped up Rs 15,220 crore from disinvestment proceeds so far in the current fiscal.

The budgeted disinvestment mop up for current fiscal is Rs 2.10 lakh crore. Of this Rs 1.20 lakh crore is to come from minority stake sale in CPSEs and Rs 90,000 crore from stake sales in state-run financial institutions.


(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)


Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel