The central government today is Tata Communications Ltd. (Tata Communications) is selling its 16.12 per cent stake through Offer for Sale (OFS). For this, the minimum price has been fixed at Rs 1,161 per share. The government initially offered to sell 2.85 crore equity shares as part of a plan to exit Tata Communications (erstwhile VSNL). After this decision of the government, Tata Communications shares fell by 7 per cent. Investors suffered heavy losses due to the fall in shares.
The government is selling about 2.85 equity shares of Tata Communications which is 10 per cent of the total issued and paid up equity share capital of the company. This is equal to 10 per cent of the paid-up equity share capital of the company. Apart from this, the government can sell additional 1.74 crore equity shares in more subscription options. This would equal 6.12 per cent stake in Tata Communications.
The government has stated in the notice for OFS that the President of India is a promoter (vendor) of Tata Communications. The seller has offered to sell 2,85,00,000 equity shares of Tata Communications on March 16, 2021. It is 10 percent of the total issued and paid-up equity share capital of the company. This sale will be for non-retail investors only.
Shares break up 7 percent
The window will open on March 17 for the sale of shares for retail investors and non-retail investors. After this decision of the government, shares of Tata Communications declined on Tuesday and during the business the stock broke up by 7 percent. On the BSE, the stock fell to Rs 1206.30 from Monday’s closing price of Rs 1297.30.
Investors got a big shock
Investors have suffered a major setback due to the fall in shares of Tata Communications. Around 2600 crores of investors were drowned. The company’s market cap at Monday’s closing price was Rs 36,998 crore, which fell by Rs 2,595 crore to Rs 34,402 crore on Tuesday.
On March 17, the government will sell 6.12 per cent under OFS and the offer will be open to retail investors and non-retail investors. The government has reserved a minimum 25 per cent stake for mutual funds and insurance companies and 10 per cent for retail investors.