Govt eyes $10bn from BSNL public offer

Govt eyes $10bn from BSNL public offer

The government on Thursday broached plans for the public listing of telecom giant Bharat Sanchar Nigam Ltd with its workers, but neither the proposal nor an offer of ESOPs found any takers.
Communications Minister A Raja, who attempted to win the consent of employees union for diluting 10 per cent of BSNL's stake, said that the listing could be in the band of Rs 300-400 a share by the end of this fiscal.

BSNL, India's top telecom firm by subscriber numbers, has a paid up equity capital of around Rs 5,000 crore (Rs 50 billion) and could achieve a revenue of Rs 50,000 crore (Rs 500 billion) at the end of this fiscal. As of end-June, BSNL had nearly 73 million wireless and fixed-line subscribers.

"This is the first time I am talking to the BSNL union on the issue of listing after its board took a decision on the same last week. We have explained to the union on how the IPO will benefit the company," Raja said after meeting the workers.

To win the consensus of the three lakh BSNL employees, the company's board offered workers 500 shares each at Rs 10 a share, while the IPO would be in a range of Rs 300-400 per share, the minister said.

The union, however, rejected the ESOP package. "This Esop is a bait.. we will not fall for it," BSNL Employees Union General Secretary V A N Namboodiri said. The union fears for jobs of workers after the IPO, as also about the growth of the company.

BSNL finance director S D Saxena said the conservative valuation was roughly $100 billion. "Vodafone got Hutchison Essar a valuation of $21 billion and this company is 5-6 times bigger," he said.

Merchant bankers have not yet been appointed for the IPO, Saxena said, adding that the process would start now.He said the IPO could happen in six months. "We will not rush into it. We will try to convince everyone. If there is a delay in the issue it is better. The valuation may go up."
But union leader Namboodiri told reporters after meeting Raja that "we are not interested in the ESOP package given by the board. We don't want any IPO in BSNL. We are not convinced with their argument that the IPO is beneficial for BSNL's growth."

BSNL chairman Kuldeep Goyal, however, said there is no timeframe as to when the IPO will happen. "There is no immediate need for it but we are preparing the ground work. . . (and claimed) we are seeing some positive reaction from the union on the issue," although the union rejected the plan outright.Appealing to the workers keep the negotiations on, Raja in a statement said that the IPO will reveal the real value of the company as also help it get Navratna status -- which would give greater financial autonomy to the telecom firm.

At Thursday's price Bharti is valued at Rs 1.61 lakh crore (Rs 1.61 trillion) and RCom at Rs 90,517 crore (Rs 905.17 billion).

SOurce: Rediff