Mumbai: Shares of Tata Communications today surged by over 7 percent in morning trade, a day after the government approved demerger of surplus VSNL land into a separate company.
The spin-off will pave the way for the sale of the land, and could be a breakthrough for the company, which has said the unresolved matter has hindered its equity raising plans, said a Business Standard report today.
After making a bullish opening, shares of the company further gained 6.83 percent to a 52-week high of Rs 264.05 on the BSE.
At the NSE, the stock surged 7.38 percent to a one-year high of Rs 263.90. The issue of surplus land has been pending since Tata Communications acquired the PSU in 2002, as the land assets owned by VSNL were not part of the deal.
The surplus land has been lying unused since the acquisition.
The land is estimated to fetch Rs 6,150 crore to the exchequer.
The demerger of 773.13 acres, spread over at least five locations including Delhi, Chennai and Pune, was proposed to be carried out through HPIL, a Special Purpose Vehicle formed
through a Cabinet decision in 2005. The DoT has proposed government taking 51.12 per cent stake in Hemisphere Properties Ltd (HPIL).
Meanwhile, rally in the stock sharply outperformed the weak broader market, where the Sensex was trading at 17,168.21, down 110.64 points at 1030 hrs.