Hinduja TMT, the shareholder that holds 5.11% stake in the company, is set to demerge its telecom business to unlock shareholder value.

Media business is also likely to be part of the demerged entity that holds the telecom business. Following the demerger, the IT and ITeS business will be part of a separate entity. No official confirmation was available.

The company has called for a board meeting on Wednesday to consider the demerger, following which the details are likely to announced.

“Hinduja TMT Ltd has informed BSE that a meeting of the board of directors of the company will be held on April 26, to consider providing in-principle approval for demerger of the company’s IT/ITeS undertaking,” it said in a notice to the stock exchange.

In the event of the demerger of the telecom business, the company will have to consider the legal implications as foreign shareholding in the company is 31.30% of the capital. Promoter holding was 63%, and the rest was with institutions and the public as on March 31,2006.

Recently, the company bought an additional 1.23% in Hutchison Essar from Sumitomo of Japan for an undisclosed sum. It now holds a 5.1% stake in the telecom company, with a representation on the board.

It is not clear, however, if they will exit the venture through a sale to one of the partners or post-IPO, when the offer does take place. This is also reportedly one of the issues the company will consider at its board meeting on Wednesday.