Tata Communications shares jump 3% on positive brokerage note after subsidiary buys 51% stake in AI platform

Tata Communications share price

The shares of Tata Communications jumped around 3 percent on December 3 as positive brokerage note by Macquarie boosted investor sentiment. This comes after the company announced that its Netherlands subsidiary is acquiring 51 percent stake in US-based AI platform Commotion.

The shares of the company rose to Rs 1,896.90 apiece on Wednesday, extending gains for the second consecutive session after the announcement of the acquisition.

Tata Communications in an exchange filing on December 2 said that its wholly owned subsidiary, Tata Communications (Netherlands) B.V. (TCNL), has entered into a Stock Purchase Agreement and ancillary Transaction Documents with Commotion to acquire a majority stake of 51 percent in the US-based AI SaaS platform for nearly Rs 277 crore.

Commotion has a subsidiary in India and delivers enterprise solutions through its proprietary software, Tata Communications said, adding that its subsidiary will acquire all outstanding shares of Common Stock.

The acquisition will be done through a combination of purchase of stock from existing shareholders and capital investment in Commotion, the company added. "The acquisition is expected to strengthen Tata Communications’ Customer Interaction Suite portfolio by integrating agentic AI and orchestration capabilities, enabling Tata Communications to deliver more intelligent, automated and personalized customer segment solutions," the Tata Group firm said.

Macquarie on Tata Communications:

Macquarie kept a 'Buy' call on the stock, with a target price of Rs 2,210 per share. This implies an upside potential of nearly 20 percent from the stock’s previous closing price.

The international brokerage said that the customer interaction suite (CIS), used to handle communication across multiple different channels, is currently the main drag on company's overall profitability in digital segment.

Tata Communications expects the latest acquisition to strengthen its CIS portfolio by integrating Commotion's products with its existing agentic Al use cases. Macquarie views the company as a beneficiary of the surge in data consumption, enterprise migration to cloud, and data localization.

Follow all LIVE updates from the stock markets here.