praveen
15-01-2008, 07:29 AM
State-owned telco BSNL on Monday said it plans to launch India’s biggest IPO to raise about Rs 40,000 crore (over $10 billion).
“The company is valued at well over $100 billion. We are looking at offloading up to 10% stake, subject to government approval,” BSNL finance director S K Saxena told reporters. When asked about the development, telecom minister A Raja said: “The government is considering it (an IPO). The department of telecom (DoT) will discuss the issue and take a final decision soon”.
BSNL has an equity base of Rs 5,000 crore, which translates to a shareholding structure of 500 crore shares at a face value of Rs 10 each. BSNL executives said this would not be a disinvestment, but a dilution of stake by the government through the issue of fresh shares. This is because the company’s authorised capital is less than that of its subscribed capital, they said.
Incidentally, the largest public offer till date by an Indian company is the one by Anil Ambani promoted Reliance Power, which is hitting the market this week. Reliance Power has said it would raise over Rs 11,000 crore from the markets.
BSNL is India’s largest telco by both revenues and subscriber numbers. The PSU, which has over 75 million customers (fixed-line and mobile), had revenues of Rs 39,750 crore in 2006-07, with a net profit of Rs 7,805 crore. BSNL has said it will invest about Rs 15,000 crore this fiscal to expand its mobile and broadband networks across the country. It has also committed to invest about Rs 60,000 crore by 2010 crore to expand its telecom infrastructure and operations.
If BSNL does manage to raise Rs 40,000 crore by selling a 10%, it would value the company at a whopping Rs 4,00,000 crore (4 lakh crore or a more than $100 billion). Incidentally, the market valuation of Bharti Airtel-India’s largest private telecom operator-is about $46 billion.
Airtel is followed by Reliance Communications, which is valued at about $41 billion.
“The company is valued at well over $100 billion. We are looking at offloading up to 10% stake, subject to government approval,” BSNL finance director S K Saxena told reporters. When asked about the development, telecom minister A Raja said: “The government is considering it (an IPO). The department of telecom (DoT) will discuss the issue and take a final decision soon”.
BSNL has an equity base of Rs 5,000 crore, which translates to a shareholding structure of 500 crore shares at a face value of Rs 10 each. BSNL executives said this would not be a disinvestment, but a dilution of stake by the government through the issue of fresh shares. This is because the company’s authorised capital is less than that of its subscribed capital, they said.
Incidentally, the largest public offer till date by an Indian company is the one by Anil Ambani promoted Reliance Power, which is hitting the market this week. Reliance Power has said it would raise over Rs 11,000 crore from the markets.
BSNL is India’s largest telco by both revenues and subscriber numbers. The PSU, which has over 75 million customers (fixed-line and mobile), had revenues of Rs 39,750 crore in 2006-07, with a net profit of Rs 7,805 crore. BSNL has said it will invest about Rs 15,000 crore this fiscal to expand its mobile and broadband networks across the country. It has also committed to invest about Rs 60,000 crore by 2010 crore to expand its telecom infrastructure and operations.
If BSNL does manage to raise Rs 40,000 crore by selling a 10%, it would value the company at a whopping Rs 4,00,000 crore (4 lakh crore or a more than $100 billion). Incidentally, the market valuation of Bharti Airtel-India’s largest private telecom operator-is about $46 billion.
Airtel is followed by Reliance Communications, which is valued at about $41 billion.