Govt to sell stake in Tata Communication to meet Sebi norms

With the June 2013 deadline coming close, the government is eyeing modes to sell up to 6% in Tata Communications. This is to comply with Sebi’s public shareholding norms, reports, CNBC-TV18’s Kritika Saxena.

Also read: Telecom tribunal asks DoT to refund Rs 5 cr to Tata Comm Securities and Exchange Board of India (SEBI) has come down heavily on all the companies who did not meet the 25 percent public shareholding norm. SEBI had earlier indicated that the 25 percent public shareholding does not include American depositary receipt (ADR). So, this came down pretty heavily on Wipro, Tata Communications and  couple of other companies. Sources indicate that since the government holds a significant stake of around 26 percent in Tata Communications, it is looking at diluting its stake. Including ADRs they have around 80 percent, excluding that, promoters hold around 76 percent. So, 5.8 percent is the amount that has to be sold off. Earlier Tata Communication wasn’t in the government's list for disinvestment. However, considering the June 2013 deadline is around the corner they are looking at modes to sell stake. Institutional placement programme (IPP), offer for sale (OFS) and couple of other placement routes are being discussed between Tata Communication and the government.Both the promoters; Tata Sons and the government of India will be taking the final decision. Some development on this matter is expected by January-February. Since, June 2013 is a deadline and if no decision is taken till March then this will be a big negative.