VSNL shares at record high on Ulcra repeal

The share price of Tata Group-owned telecom and Internet major Videsh Sanchar Nigam (VSNL) hit a lifetime high of Rs 642.30 on the BSE on Friday after the Maharashtra assembly repealed the Urban Land Ceiling and Regulation Act (ULCRA) on Thursday.

The shares zoomed over 12% (Rs 67.85) on Friday to close at Rs 626.40 as against the previous close of Rs 558.75. The counter logged a huge volume of over 11 lakh shares as against the two-week average volume of 2.9 lakh shares.

"VSNL has around 773 acre land across the country of which around 524 acre is in Pune. The act becomes beneficial to the company if the promoters (the Tata Group and the government) reach an agreement either to sell off or retain the land for additional projects," a telecom analyst said.

When contacted, a Tata Group spokesperson declined to comment on the developments.

The VSNL land bank of 773 acre was not part of the disinvestment process when the Tata group acquired an initial 25% stake from the government in 2001. There were different opinions on the land with telecom ministers undecided on whether to sell it off or retain it with the company.

The Tatas now hold 51% stake in the company. While the government holding is 26%, the remaining stake is held by the general public.