Near-term pressure for Tata Communications' data business

While sale of surplus land ends that uncertainty, execution in the core business has to improve if stock is to be re-rated

The monetisation of Tata Communications' surplus land is finally taking off, after the board of directors approved its transfer to a separate company, Hemisphere Properties. Minority shareholders will get a share in the new entity for every one held in Tata Communications (Tata Comm). The government owns 51 per cent, while minority shareholders of Tata Comm and the erstwhile VSNL have 25 per cent and 20 per cent, respectively; Tata Sons has four per cent.

Going ahead, the newly demerged entity, whose land holdings are valued at Rs 9,400 crore, will be listed. About 60 per cent of the 740