The Tata Group has decided not to exercise its call option to buy out the government's residual 26.12 per cent stake in Videsh Sanchar Nigam Limited (VSNL).

Although the group had earlier asked the government to sell the stake, it is concerned about its valuation. Until now, there has been no consensus on how to calculate a fair price for the residual share.

However, the group may resort to open market purchase of VSNL's shares to raise its holding in the company.