TATA group company Tata Communications (TCL) has recovered over half of
its initial investment in the unlisted Tata Teleservices (TTSL) by
selling a minuscule portion of its stake in the firm.
TCL has sold a 1% stake in TTSL for Rs 424 crore. It was in 2002 when TCL, then called Videsh Sanchar Nigam Limited, acquired a 19.9% stake in TTSL for Rs 636 crore. Over time, with changes in the shareholding structure, TTSL’s stake went down to under 15%.
Tata Power, another Tata group company, also sold a part of its holdings in TTSL for Rs 317 crore. The price at which Tata Power acquired this holding has not been made public.
Importantly, all this has taken place after Japanese telecom major NTT Do-CoMo late last year acquired a 26% stake in TTSL for $2.7 billion. This was a combination of fresh equity to the extent of 20% with the balance 6% coming in by acquiring stakes of existing shareholders.
Prior to the deal with NTT DoCoMo, Tata Sons with 45% was the single largest shareholder in TTSL while a consortium consisting of Tata Group companies held a 21.7% stake. Entrepreneur C Sivasankaran held 8% stake while Temasek held just under 10%.
The new shareholding pattern after the fund infusion by NTT DoCoMo has not been disclosed though it is gathered that TCL will hold a 10.3% stake.
Since then, TTSL from being a fairly marginal player, has grown to having a pan-India presence with a subscriber base in excess of 34 million.
India has a subscriber base of over 400 million at this stage. TTSL with a market share of 9% is the sixth-largest service provider in India. Its key competitors like Bharti Airtel, Reliance Communications and Idea Cellular are listed entities.
“Telecom valuations in India have been soaring over the last few years. Factors like impressive subscriber additions each month and the infusion of funds have helped companies in commanding larger valuations,” said an analyst tracking the telecom sector.
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