Apr, 2021 - By SMI
On March 19, 2021, the Government of India had confirmed its exit from Tata Communication after selling 10% of stakes to Tata Sons-owned Panatone Finvest in an overseas dealing.
The subsidiary of Tata Group, Tata Communications Limited, has announced on March 19 in a regulatory filing that the central government of India will be exiting its whole 26 percent of share-holding in the company. The Indian government has sold its 16 percent stakes as a OFS (offer-for-sale) on the stock exchanges. The OFS was open until March 17 with the bidding done for over 46 million shares. After the sale of this stock, the remaining 10 percent stakes will sold to Panatone Finvest, an investment venture by Tata Sons, who already own around 48 percent stakes in the company. Combining these stakes, Tata Sons will witness a rise in their stakes to 59 percent. The exit of government makes Tata Sons the sole administrator of Tata Comm’s operations. The government did not want to get involved equity dilutions with other shareholders. Now, Tata Sons can execute its equity fund-raiser initiatives to attract investments for company’s growth.
Initially known as Videsh Sanchar Nigam Limited (VSNL), Tata Communications was acquired by Tata Sons in a race against Reliance Industries Limited (RIL) back in 2002.
Recently, the Government of India had owned about 26 percent of stakes in Tata Communications, the Tata Sons possessed about 14 percent along with their business arm Panatone Finvest with 34 percent of stake in the company, while the remaining 25 percent stakes were public IPOs (initial public offerings).
With departure of the Indian government from Tata Communication Limited, Tata Sons will offer a flexible administration in the decision-making and the strategy-planning processes in the future.
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