Tata Teleservices (Maharashtra) surged 12.30% to Rs 9.04 at 13:04 IST on BSE after Japan's NTT Docomo announced its plan to sell its entire stake of about 26.5% in Tata Teleservices.
Meanwhile, the BSE Sensex was down 138.21 points, or 0.60%, to 22,738.33.
On BSE, so far 47.38 lakh shares were traded in the counter, compared with an average volume of 4.57 lakh shares in the past one quarter.
The stock hit a high of Rs 9.30 and a low of Rs 7.99 so far during the day. The stock hit a 52-week high of Rs 10.26 on 21 May 2013. The stock hit a 52-week low of Rs 4.83 on 13 June 2013.
The stock had outperformed the market over the past one month till 23 April 2014, rising 15.83% compared with the Sensex's 5.15% rise. The scrip had also outperformed the market in past one quarter, rising 7.05% as against Sensex's 7.03% rise.
The small-cap company has an equity capital of Rs 1954.93 crore. Face value per share is Rs 10.
NTT Docomo Inc. announced today, 25 April 2014, that its board of directors resolved today, 25 April 2014, to exercise option for the sale of the company's entire stake (124.89 crore shares, or about 26.5% of outstanding shares) in Tata Teleservices (TTSL), a Docomo-affiliated company accounted for by the equity method, as soon as the conditions for such exercise are met.
Docomo, TTSL and Tata Sons, Tata Group's holding company, concluded a shareholder agreement when Docomo entered into a business alliance with TTSL in March 2009. Under the agreement, Docomo holds the right to require that its TTSL shares be acquired for 50% of the acquisition price, which amounts to Rs 7250 crore or a fair market price, whichever is higher, in the event that TTSL fails to achieve certain specified performance targets (the above-mentioned option), Docomo said in a statement.
In the event that TTSL fails to achieve these performance targets by the end of the fiscal year ended 31 March 2014, Docomo plans to exercise the above-mentioned right in or before June 2014. Docomo expects to sell its TTSL shares in accordance with the agreement. It is uncertain how the option will be performed, however, and Docomo is not able to predict how events will unfold. The effect on Docomo's corporate earnings for the fiscal year ending 31 March 2015 cannot be forecast at this time due to these uncertainties, the Japanese firm said.
Tata Teleservices Maharashtra (TTML) is the listed entity of telecom operator Tata Teleservices. As on 31 March 2014, NTT Docomo held 11.76% stake, Tata Teleservices held 36.54% stake, Tata Sons held 19.58% stake and Tata Power Company held 7.02% stake in TTML.
TTML reported net loss of Rs 156.36 crore in Q3 December 2013 as against net loss of Rs 197.16 crore in Q3 December 2012. Net sales rose 3.51% to Rs 662.26 crore in Q3 December 2013 over Q3 December 2012.
TTML spearheads the Tata group's presence in the telephony sector in the telecom circles of Maharashtra (including Mumbai) and Goa.
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