C Sivasankaran to sell his 3.75% stake in Tata Teleservices

Serial entrepreneur C Sivasankaran has initiated moves to sell his 3.75% stake in Tata Teleservices as he looks to raise cash to build a war chest for newer investment opportunities during the economic slowdown. The billionaire investor, or Siva as he's popularly called, has mandated the Nimesh Kampani-promoted investment bank JM Financial to find a potential buyer, and the bank has sounded out private equity funds and hedge funds, said two people close to the transaction. The Siva group owns 27.46 crore shares, translating into a 3.75% stake in Tata Teleservices. The shares have been held through Siva Industries & Holdings, SIG Event Management and Enterprises and Goldman Dealer Pvt Ltd, according to a recent filing made by Tata Teleservices with the Registrar of Companies (RoC). Neither Sivasankaran nor Tata Teleservices responded to a set of e-mail questions on the issue, while JM Financial declined to comment. "Siva wants to strengthen the balance sheet at a time when the slowdown opens up good investment opportunities. He had recently exited from Aamby Valley and Hindoostan Mills," said a person close to the Siva group. Sivasankaran, 55, who is known for his skill to buy stake in companies at lower valuations and then exit with handsome profits, pared his stake in the country's second largest CDMA operator from 8% in 2006. The Siva group chairman had sold part of the stake to Tata Tele's strategic partner DoCoMo in 2009. Japanese major DoCoMo, which bought 26% stake in Tata Teleservices, had acquired 6% from the then shareholders on a pro-rata basis. The Tatas own close to 60% in the telecom company. The Siva group, which paid Rs 1,000-1,200 crore to buy 8% stake in Tata Tele in 2006, will find it difficult to get a good valuation as revenues in the telecom sector have been hit by stiff competition and adverse regulatory and tax laws. Country's top telecom player Bharti Airtel reported its 10th straight quarter profit decline as competition squeezed margins and most carriers in the once-booming sector are languishing in the red. Figures for the unlisted telecom company Tata Teleservices are not available in the public domain. However, its listed arm Tata Teleservices (Maharashtra) widened its net loss to Rs 162 crore for the first quarter ended June 30, 2012. "Telecom sector isn't performing well. Debts have reached alarming levels and regulatory hurdles are posing a major threat. It's difficult to get good valuations at this point in time," said Ankita Somani, research analyst at Mumbai-based Angel Broking. Despite the economic slowdown pushing down valuation in the real estate sector, Siva group had recently sold its 50% stake in Mumbai-based Hindoostan Mills property. It had exited Sahara Group's Aamby Valley project last year, netting a profit of around Rs 600 crore in four years. www.dg3.dgevent.in