Dream run of Tata Teleservices (Maharashtra) to halt; heres why!

Tata Teleservices (Maharashtra) has informed the exchange that pursuant to the Empowered Committee of the Board of Directors, at its meeting held on January 11, 2022, the company is expressing its desire for the conversion of the full amount of interest payable for the 4 years of deferment on the deferred AGR dues into equity (subject to mutual agreement on the terms and conditions), including, the governance of the company post conversion of the interest amount into equity shares and various regulatory/legal provisions including Section 62(4) and Section 53 of the Companies Act.

The company will communicate the foregoing to the Department of Telecommunications (DoT). the net present value (NPV) of the interest payable is expected to be approximately Rs 850 crore as per the company’s best estimates, subject to confirmation by the DoT.

The average price of the company’s shares at the relevant date of August 14, 2021 as per the calculation method provided in the DoT communication works out to be ~Rs 41.50 per share, subject to final confirmation by the DoT.  In case of conversion, it will result in dilution of all the existing shareholders of the company, including the promoters. Following conversion, it is expected that the Government will hold approximately 9.5 per cent of the total outstanding shares of the company.

Tata Teleservices (Maharashtra) has been the star performer of 2021. Shares of the company have skyrocketed by 2,860.71 per cent over the last 1 year.  

The scrip has had a dream run, continuously hitting 5 per cent upper circuit over the last 13 trading sessions including today. 

Shares of Tata Teleservices (Maharashtra) have closed at Rs 290.15 on NSE and Rs 290.05 on BSE. 

Investors should keep a close eye on this stock for more action tomorrow!