Tata Communications shares went down a sharp 4% at market open on Friday.
What Happened: The slump in the Tata Group stock comes as the company announced acquiring U.S.-based telecom company Kaleyra. The company also has subsidiaries in Italy, India, UAE, Germany, UK, Dominican Republic, Mexico, Africa and Canada.
As per a regulatory filing, the group provides omnichannel integrated communication services with a set of proprietary platforms to large organisations worldwide including financial institutions, e-commerce organisations, OTTs, software companies etc.
See Also: This Tata Stock Hit New 52-Week High Today: Why Analysts See Further 10% Upside
The total deal value is around $100 million (₹820 crore). The company has a gross debt of $224.9 million and net debt of $149.9 million as on March 31, 2023. The company’s consolidated revenue stood at $339.17 million (₹2782.72 crores) for the 12 months ended December 31, 2022.
As per the Tata Company, the proposed transaction will provide a direct opportunity for it to expand its CPaaS (Communication Platform as a Service) business globally. The company expects to close the deal within 6-9 months following the signing.
Reacting to the announcement, domestic brokerage firm ICICI Securities said that it will likely enhance Tata Comm’s global position in CPaaS space. The brokerage maintained its ‘buy’ rating for the stock raising the price target to ₹1,810 from ₹1,665.
However, investors do not seem to be thrilled with the acquisition.
Price Action: Tata Communication’s share price was down 2.83% to trade at ₹1,538 as the markets opened on Friday.
Read Next: What HDFC And HDFC Bank Merger Means For Shareholders
Don't miss a beat on the share market. Get real-time updates on top stock movers and trading ideas on Benzinga India Telegram channel.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.