Govt Sells Entire Stake In Tata Communications; Earns Rs 8800 Crore From Disinvestment.
The central government has completed the disinvestment of its entire 26.12 per cent stake in Tata Communications for Rs 8,846 crore, inching closer to the revised disinvestment target of Rs 32,000 crore for FY21.
“Disinvestment of government holding completed of 16.12% in TCL through OFS at Rs 5,457 crore and 10% to a strategic partner at OFS discovered price for Rs 3,389 crore. With this, government exits from TCL with total proceeds of Rs about Rs 8,846 crore,” department of investment and public asset management (DIPAM) secretary Tuhin Kanta Pandey said on Twitter.
The Disinvestment Plan For FY22
In her Budget 2021 announcement, Finance Minister Nirmala Sitharaman is expected to lay out the government’s divestment strategy for the current fiscal year.Covid-19 has blown the carefully knitted human civilization and gave us a herculean task to reshape our systems. Considering the unprecedented situation, the government is now thinking to make up for the losses.
Tuhin Kanta Pandey, DIPAM Secretary, says the strategy is to build a strategic disinvestment pipeline, which does not happen overnight. “The finance minister has emphasised that the strategic disinvestment pipeline is important because that could add a lot of value not only to stocks of existing PSUs, because management control will be passed on, but also to the overall government philosophy that it need not be in business,” he told Business Today.
Centre target disinvestment of Rs 1.75 trillion for FY22, banking on a string of privatizations, including Bharat Petroleum Corporation Lts (BPCL) and Air India, and the initial public offering (IPO) of Life Insurance Corporation of India.
Centre Offloading The TCL Stake In Two Tranches
Tuhin Kanta Pandey, Secretary of the Department of Investment and Public Asset Management (DIPAM), indicated that the Centre sold its stake in Tata Communications (TCL) in two tranches
“The government’s exit from TCL gives a clear message that we are not there to squat. We got a tremendous amount of value addition. The timing was also important. Within one year, the stock has gone up four times,” a finance ministry official said on condition of anonymity.
“We wish to inform you that we have 2,85,00,000 equity shares held by us in Tata Communications Limited representing 10 per cent of the total shareholding of the company, to the buyer on March 18, 2021, by way of an off-market trade,” the department said in a regulatory note on behalf of the President of India.
The TCL sale marked the government’s exit from the erstwhile Videsh Sanchar Nigam Ltd (VSNL), a central public sector enterprise that was privatized in 2002 by divesting a 25% shareholding along with transfer of management control to Panatone Finvest Ltd, named the strategic partner. After the disinvestment, VSNL was renamed TCL.