Tata Tele Surges After Report on Docomo Stake ValuationBhuma Shrivastava
Tata Teleservices Maharashtra Ltd. surged the most in 15 months in Mumbai trading after a report the company’s parent will be allowed to pay more than a “fair” price to buy out NTT Docomo Inc.’s stake.
The Reserve Bank of India may allow the Tata Group to purchase Docomo’s 26.5 percent holding in Tata Teleservices Ltd. at a previously agreed price of 58.045 rupees, versus an independently determined “fair value” of 23.34 rupees, the Economic Times reported, citing people it didn’t identify. The RBI is easing a norm that bars local companies from paying more than fair value for such deals, the newspaper said.
Shares of Tata Teleservices Maharashtra jumped by their daily limit of 20 percent, the biggest intraday increase since October 2013, and traded at 10.02 rupees as of 11:20 a.m.
The Mumbai-based company provides telephone services in the western Indian states of Goa and Maharashtra, while closely held parent Tata Teleservices is a pan-India mobile-phone operator.
Tata Sons Ltd. is awaiting a response to its application from the banking regulator, the group’s holding company said in an e-mail. The RBI will decide after getting the finance ministry’s views, the newspaper reported.
Alpana Killawala, the RBI’s spokeswoman, declined to comment.
Japan’s largest mobile-phone carrier had paid $2.6 billion in 2009 and 2011 for the minority stake in the Indian cellular service provider. NTT Docomo announced in April that it was exercising the option to sell the stake back.
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