Shares of Tata Teleservices have hit the five per cent lower circuit on Wednesday as the company decided to opt for conversion of the interest from adjusted gross revenue (AGR) dues into equity.
Following the conversion of the dues, the Centre would hold 9.5 per cent stake in the company, it said in a regulatory filing on Tuesday.
The conversion, however, will be subject to a mutual agreement on the terms and conditions, including the governance of the company post-conversion of the interest amount into equity shares, it added in the filing.
On Wednesday, the company's shares settled at Rs 275.65 per share, down five per cent from the previous close.
"There is a lot of speculation around this stock daily hitting upper and lower circuits. We might expect the stock to hit the lower circuit as it will create a panic. Tata Teleservices has an AGR due of Rs 16,798 crore out of which Rs 4,197 crore has been paid," said Manoj Dalmia, Founder and Director, Proficient Equities.
"(However,) The initiative seems good as converting such debts is beneficial for both government and company."
Tata Teleservices deals in broadband, telecommunications and cloud services.
