Government to sell 26.12% stake in TCL through OFS

The Centre is looking to sell its 26.12 percent stake in Tata Communications (TCL) through offer of sale (OFS) to raise Rs 8,000 crore.

The Centre will sell a big part of its stock to majority stockholder – the Tatas and a smaller part through OFS to the stock market, a Finance Ministry official told.

"How much exactly will be sold through OFS has not been decided yet, the Cabinet Committee on Economic Affairs has approved selling up to 16 percent stake through OFS and the remaining to Tatas," the official said, adding that the OFS is expected to be completed before FY21-end.

The Department of Investment and Public Asset Management (DIPAM) has invited bids for the OFS from merchant banker (MB)-cum-selling brokers till February 3. Bidding will be opened on February 4 and the transaction completed on March 20, 2021, per bid documents, the report said.

The bid document further stated that the OFS will be structured in such a way that it does not trigger an open offer again, and the "appointed MB would advise the government in this regard and also on any exemption required from the Securities and Exchange Board of India (SEBI)."

The government holds stake in TCL through its investment in erstwhile Videsh Sanchar Nigam (VSNL) which was privatised in 2002 by divesting 25 percent stake and transfer of management control of Panatone Finvest. This stake was acquired by the Tata Group as strategic partners (SP) and renamed TCL.