The Hindu Business Line : BSNL’s IPO plans still on cards: Scindia

New Delhi, Feb. 19 The Ministry of Communications and IT on Thursday said that the proposed initial public offering (IPO) by Bharat Sanchar Nigam Ltd was very much on the cards and it was only a matter of having better market conditions.

The proposal had run into rough weather after the BSNL employees union threatened to go on an indefinite strike.

Navratna status

Replying to a question in the Rajya Sabha, the Minister of State for Communications and IT, Mr Jyotiraditya Scindia, said, “The Government is contemplating to offer part of its equity shareholding in BSNL by an offer for sale to the public. It will facilitate BSNL to get Navratna status, it will be useful for improving the image of BSNL and it will promote growth of BSNL. The timing of the issue depends on the conditions of the capital market.”

With regard to concerns raised by its employees’ union, Mr Scindia said, “The Joint Forum of BSNL Unions and Associations of BSNL employees had given notice for indefinite strike against the IPO proposal.

The advantage of listing BSNL shares were explained to the representatives of Joint Forum. The proposed strike had been deferred by the Joint Forum.”

BSNL has proposed to dilute 10 per cent of Government equity holding for the IPO to raise about $10 billion. The Communications Ministry had earlier said that the listing could be in the band of Rs 300-400 a share.

BSNL has a paid-up equity capital of around Rs 5,000 crore and could achieve a revenue of Rs 50,000 crore at the end of this fiscal.

Conservation valuation

BSNL officials said the conservative valuation was roughly $100 billion. They said that the IPO could fetch anywhere between Rs 20,000 crore and Rs 40,000 crore depending on the market conditions. The fund would enable BSNL to roll out network into the remote areas of the country.

However, it is not clear how the Government plans to address the concerns raised by the employees union. To win the consensus of the three lakh employees, the company’s board offered workers 500 shares each at Rs 10 a share. The union, however, rejected the ESOP package.