Tata Teleservices plunges by 17 per cent on exit plan

The share prices of Tata Teleservices plummeted on Tuesday on the back of news reports that the company plans to wind up its business. The stock plunged steeply by nearly 18 per cent, hitting its 52-week low of Rs. 4.25 per share on BSE.

Tata Sons Chairman, N Chandrasekaran had expressed that the debt-laden company was in bad shape and that the management will soon take a tough call on the mobile company, in an interaction with a leading news daily.

According to various news reports, the company has been preparing an exit plan for its 5,000 employees. The company is burdened by a surmounting debt of Rs. 31,000 crore towards spectrum liability and has been incurring cash losses every month.

The company which was set up in 1996, had launched its CDMA operations in 2002, later adopting GSM in 2008. The company had also received investment worth Rs. 14,000 crore from NTT Docomo, however, the joint venture was eventually dissolved in 2014 after incurring heavy losses.

The stock hit an intraday high of Rs. 4.86 per share, and remained below its previous close level, and also witnessed a spurt in its volume by more than 2.99 times during Wednesday’s trade. At 1119 hours, the stock was trading at Rs. 4.49 per share, down by 10.20 per cent on BSE.

Meanwhile, S&P BSE Sensex was trading at Rs. 31,992.93 level, higher by 0.46 per cent and NSE Nifty50 was trading at 10,029.15 level, higher by 0.40 per cent during Tuesday’s trade.