BSNL initial offer to raise Rs40,000 crore; pricing seen at Rs300-400 a share

07 August 2008

Mumbai: The government has targeted to raise a whopping Rs40,000 crore ($10 billion) in the country's largest-ever initial share offer through a sale of stake in state-owned telecom firm Bharat Sanchar Nigam Ltd (BSNL), but a decision is likely to be made only after talks with trade unions.

Telecom minister Andimuthu Raja said the board of BSNL, the country's largest telecom company, had approved the IPO proposal, but said he had asked the public sector firm to first negotiate with the unions.

"After that the government can come to a conclusion what type of decision can be taken," Raja said, adding there was no set time-frame.

As per the issue plan, BSNL's 304,000 employees will be offered 500 shares each at Rs10 a share against the IPO price range of Rs300-400 per share, Raja said.

BSNL is the country's top telecom company by subscriber numbers, although it lags in mobile services behind leaders Bharti Airtel Ltd, Reliance Communications Ltd and Vodafone Essar.

BSNL had nearly 73 million wireless and fixed-line subscribers as of end-June, slightly ahead of Bharti Airtel's nearly 72 million users.