TPG Capital-backed group led by Mukund Rajan makes bid to buy Tata Tele assets for $1 billion

Tata Group may soon sell the assets of loss-making Tata Teleservices, which recently sold its mobile business to Airtel. Reports suggest a consortium backed by a US-based investment group has bid to buy the assets of the company. A TPG Capital-backed consortium comprising several executives of Tata Group placed bid to buy the Tata Tele enterprise for around $1 billion, reported Bloomberg. The consortium is led by Mukund Rajan, who's the head of international operation of Tata Teleservices; he is also the brother of former RBI Governor Raghuram Rajan.

Another player who could also bid for Tata Teleservices is its sister company Tata telecommunications, which in the past had said it was interested in buying the enterprises' fixed-line business. If that happens, TPG-backed consortium could face competition in closing the deal. The report says many other players could still emerge to bid for the company's fiber business sale.

Tata Teleservices owns optical transmission network of over 113,000km across the country. If the deal happens, the company, already suffering from huge debt burden, could repay some of its debt of Rs 28,000 crore.

Tata Teleservices and Tata Teleservices Maharastra sold consumer mobile businesses to Airtel on a debt-free cash-free basis in October. Bharti Airtel now owns Tata consumer mobile businesses operations across the country in 19 circles. Earlier, it was reported that Tata Tele's debt will be settled by Tata group. Tata will retain its stake in Viom and take care of associated liabilities -- American Tower Company (ATC) owns 51 per cent stake in Viom while Tata Tele holds 33 per cent and Tata Sons 2 per cent.
The telecom sector has been witnessing rough weather in terms of profitability due to rising competition and lower margins, resulting in large scale lay-offs in the sector. The so-called 'tariff war' started by Mukesh Amabni-led Reliance Jio has caused consolidation in the telecom sector amid mounting losses.

The year 2017 saw many telecom companies merging their telecom businesses. Prominent deals include Vodafone India and Idea Cellular merger, Airtel's acquisition of Tata Tele's mobile business and Telenor and Tikona digital. Reliance Jio, which has turned profitable for the first time after its launch 16-month ago, bought Anil Ambani-led RCom's wireless assets, including spectrum, tower, fibre optic, for a total value of nearly $3.75 billion.