The government will sell a 16.12% stake in Tata Communications through an offer for sale and the remaining 10% of its holding in the company to Panatone Finvest, an investment arm of Tata Sons. The sale will bring an end to the government’s nearly 20-year-old involvement in Tata Communications.
The government will sell the 10% stake to Panatone Finvest immediately after the OFS, at the price determined through the offering, Tata Communications said in an exchange filing late on Friday.
Tata Communications’ shares closed 2.65% lower at ₹1,289.75 Friday on the BSE. At that price, the government’s 26.12% stake is worth more than ₹9,600 crore.
Panatone Finvest and Tata Sons hold 34.80% and 14.07%, respectively, in the company. The government, Panatone Finvest and Tata Sons are the promoters of the company. The government’s holding was a big hurdle in the company’s fundraising plans via equity, which meant it was dependent solely on debt funding to invest in business expansion.
VSNL was divested in 2002 by the government and the management control of the company was passed on to the strategic partner Panatone Finvest.