Centre to exit its holding in VSNL this fiscal, sell 26.12% stake

The government will sell its entire 26.12 per cent stake in Tata Communications Ltd (TCL), erstwhile VSNL, through an 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 the 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.