Tata Communications shares in focus; approves slump dale of digital services biz

Shares of Tata Communications Ltd will be in the focus during the trading session on Friday as the Tata Group firm has given a green signal to hive off hive-off of its identified new edged digital services business to its subsidiary. The company informed about the same through an exchange filing with the bourses on Thursday.

The company board of Tata Communications at its meeting held on Thursday approved the proposal to enter into a business transfer agreement for the hive-off of the company's identified new edged digital services business to its wholly owned subsidiary, Novamesh as a going concern on ‘slump sale’ basis, said Tata Communication in the exchange filing.

"The transfer of the identified business undertaking to Novamesh is subject to the satisfaction of conditions precedent as stipulated in the Agreement and receipt of such permissions and consents, as may be required," it added. "The consideration to be received from the sale, in accordance with the terms of the agreement, is Rs 458 crore."

The turnover and net worth, basis the carved out balance sheet of the company, as of December 31, 2023 was Rs 638.71 crore and Rs 457.90 crore, respectively. The turnover and net worth as of March 31, 2023 from new edged digital services business has not been prepared at this stage, the company said.

Shares of Tata Communications settled at Rs 1,908.40 on Thursday, rising more than a per cent and commanding a total market capitalization of about Rs 55,000 crore.

"The hive-off of the identified business undertaking to Novamesh will enable a simplified and agile approach of providing new edged digital services, focused on customer value creation and gaining market leadership in new edged digital services. There will not be any change to the shareholding pattern of the Company pursuant to this transaction," the company added.

Tata Communications, a Tata Group company, is engaged in the business of providing telecommunications services. Novamesh is a newly incorporated company authorised to undertake the business of providing information technology enabled and related services.