Tata Communications gains as board approves demerger of surplus land

The stock surged 9% to Rs 758 on the BSE after the company said the board approved demerger of around 773 acres of surplus land to a separate company and listing it subsequently.

Tata Communications surged 9% to Rs 758 on the BSE in early morning trade after the company said the board has approved demerger of around 773 acres of surplus land to a separate company and listing it subsequently.

"The board of directors of Tata Communications at its meeting held today has approved a draft scheme of arrangement and reconstruction between Tata Communications and Hemisphere Properties India Limited (HPIL) and their respective shareholders," Tata Communications said in a BSE filing.

The scheme provides for a demerger by way of reconstruction or splitting up the Company by way of transfer of the surplus land to HPIL and the consequent issue of equity shares by HPIL to the shareholders of Tata Communications in the ratio of 1:1 i.e. one equity share for every one share held, it added.

HPIL is the SPV formed through a cabinet decision in 2005 to execute the transaction on surplus VSNL land.

At 09:17 AM; the stock was up 6% at Rs 738 on the BSE as compared to 0.19% rise in the S&P BSE Sensex. The trading volumes on the counter more than doubled with a combined 975,931 shares changed hands on the NSE and BSE so far.