16 Mar , 2021 By : kanchan Joshi
Shares of Tata Communications tumbled as much as 7% on Tuesday on the BSE as offer for sale (OFS) to sell government holding in the company opened for institutional investors.
At 02.45 pm, Tata Communications was trading 5.02% down at Rs1,228.80 as against a rise of 0.096% in the benchmark index.
The government is to sell its 10% stake, with an option to sell an additional 6.12% stake in Tata Communications. As of 31 December 2020, the government held 26.12% through the President of India. Panatone Finvest, an investment arm of Tata Sons owns 34.8%, while Tata Sons has 14.07% stake in the company.
The floor price has been set at Rs1,161, and the sale of 16.12% stake could fetch the government around Rs5,334 crore. The offer would open for retail investors on Wednesday.
Last week, Tata Communications had said: "As an initial step, the government is to sell up to 45.95 million equity shares, forming 16.12% equity shareholding of the company through an OFS through the stock exchange mechanism. Immediately after the OFS, the government shall sell the remaining equity shares held by it in the company to Panatone."
Tata Communications reported over a five-fold jump in consolidated net profit at Rs309.41 crore for the December 2020 quarter against a profit of Rs58.85 crore in the corresponding period of the preceding fiscal. Revenue from operations was almost flat at Rs4,222.83 crore during the reported quarter from Rs4,228.27 crore in the year-ago period.
In the past one year, shares of Tata Communications gained 385% compared with a 61% rise in the S&P BSE Sensex. The stock hit an all-time high of Rs1,365 on 8 March 2021.
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