New Delhi: Shares of Tata Communications surged 5% to 273 on BSE amid the company's land bank demerger into a separate company.

The stock froze on BSE after touching its upper circuit of 5%. The company's stock had tumbled to a 52-week low of 260 during intra-day trade. On NSE, the stock is also up 5% hitting the upper circuit.

The company on 8 August had said that the Ministry of Corporate Affairs (MCA) approved Hemisphere Properties India (HPIL) demerger scheme on 5 August and it had filed the order with the Registrar of Companies on 17 September.

As per the demerger plan, the company would transfer the surplus land to HPIL after consequent issue of equity shares by HPIL to shareholders of the company.

"The company has been informed by HPIL that MCA has approved the scheme, through its order dated 5 August 2019 and HPIL has filed the order with the Registrar of Companies, New Delhi today," Tata Communications informed in a regulatory filing earlier.

The Mumbai Bench of National Company Law Tribunal (NCLT) had approved the scheme on 12 July 2018.

As per the demerger plan, the company would transfer the surplus land to HPIL after consequent issue of equity shares by HPIL to the shareholders of the company.

This will be followed by transfer of equity shares of HPIL allotted to Panatone Group Companies (collectively Panatone, Tata Sons Limited and Tata Power Company Limited) to the erstwhile shareholders of the company who had tendered shares in the open offer by Panatone and to the Government of India.

VSNL was divested in 2002 by the government and the company's management control was passed on to the strategic partner Panatone, a special purpose vehicle under the Tata Groups of Companies.

(With inputs from Agencies)

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