With its exit from TCL, government has mopped up ₹31,006 crore under disinvestment
TCL posted a consolidated operating profit or Ebitda of ₹1,046 crore in the quarter, up 37.5% from a year ago
The government has raised ₹8,846 crore through the sale of its 26.12% stake in Tata Communications Ltd (TCL), inching closer to the revised disinvestment target for FY21.
For FY21, The Union finance ministry had slashed its disinvestment target from ₹2.1 trillion to ₹32,000 crore because of the disruptions caused by the covid-19 pandemic. With the addition of the proceeds from the sale of its stake in TCL, the government has mopped up ₹31,006 crore already.
The finance ministry has set an ambitious disinvestment target of ₹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.
“Disinvestment of government holding completed of 16.12% in TCL through OFS (offer for sale) at ₹5,457 crore and 10% to strategic partner at OFS discovered price for ₹3,389 crore. With this, the government exits from TCL with total proceeds of about ₹8,846 cr," department of investment and public asset management (DIPAM) secretary Tuhin Kanta Pandey said on Twitter.
Mint had reported on 21 January that the government may garner around ₹8,000 crore from the stake sale. DIPAM had set a floor price of ₹1,161 per share for the stake sale that began on 15 March.
“The government’s exit from TCL gives a clear message that we are not there to squat. We got 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.
On Monday, the TCL share price declined 2.13% to ₹1,150.20.
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. Subsequent to the disinvestment, VSNL was renamed TCL.