Tata Communications tumbled 5.96% to Rs 1140.75 on the BSE after the company's offer for sale (OFS) concluded on Wednesday, 17 March 2021.
The Government of India proposed to sell up to 2,85,00,000 equity shares (representing 10% stake) of the company through the OFS. The floor price for the OFS is Rs 1161 per equity share, a 10.51% discount to Tata Comm's closing price of Rs 1297.30 on Monday, 15 March 2021.
The Government of India held 26.12% stake in Tata Communications as of 31 December 2020.
The OFS opened on Tuesday (16 March 2021) for non-retail investors, while both retail as well as non-retail investors were allowed to subscribe on Wednesday (17 March 2021). A total of 10% of the total offer size was reserved for retail investors.
On Tuesday (T day), the OFS received subscription for 5,63,56,316 shares (equivalently was subscribed 219.71%) as against the base non-retail offer size of 2,56,50,000 shares.
Following the strong response on T day, the government decided to exercise the oversubscription option of 1,74,46,885 shares (6.12% equity) in addition to the base offer. Accordingly, the final share sale was 4,59,46,885 shares, constituting 16.12% of the paid-up equity share capital of Tata Communications.
As on 15:30 IST on Wednesday (T+1 day), the OFS received total bids for 48,61,212 shares or 105.80% of the total enhanced retail offer size of 45,94,689 shares.
The retail segment received bids for 67,212 shares or 1.46% of the total retail offer size.
The non-retail segment received bids for 47,94,000 shares or 104.34% of the total retail offer size.
Public sector VSNL was privatised in the year 2002 by disinvesting 25% shareholding along with transfer of management control to the strategic partner, Panatone Finvest. Following the strategic disinvestment, the name of the company was changed to Tata Communications.
Panatone Finvest held 34.80% stake in Tata Communications (TCL) as on 31 December 2020.
On Friday (12 March 2021), Tata Communications announced the signing of amendment agreement between Government of India, Panatone Finvest, Tata Sons and the company for sale of the entire shareholding in the company by the Government of India.
Immediately after the OFS, the government shall sell the remaining equity shares held by it in the company to Panatone. Upon completion of aforesaid transactions, the government will cease to be a shareholder of the company.
Tata Communications is an Indian telecommunications company. On a consolidated basis, the company posted 428.1% jump in net profit to Rs 309.15 crore on a 0.1% decline in net sales to Rs 4,222.83 crore in Q3 FY21 over Q3 FY20.
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