The Hindu Business Line : MTNL shares rally on privatisation buzz

FOR the MTNL stock, it was not a prank call on Thursday on major bourses. The stock closed up 7.37 per cent at Rs 137.70 (52-week high: Rs 142.50) on the NSE, with a traded quantity of over 78.23 lakh (27.70 lakh) shares. On the BSE, it logged a trading volume of 30.03 lakh (11.30 lakh) shares. In NSE futures segment, it was the most active counter and registered 3,789 (April) contracts with a premium of Rs 1.15.

According to dealers, the BSNL proposal to cut ILD and STD rates enthused the market as it expected a matching competitive offer from MTNL also. "The buzz was based on the assumption that in a price-sensitive market, MTNL would have few options left. However, if the rate cut is effected, MTNL might have a price edge over private cellular operators, who had eaten into its two-metro spread in the domestic market, particularly the corporate customers,'' observed Mr Anant Katare of Khandwala Securities.

Mr Gaurav Dua of Anagram Stockbroking pointed out that MTNL's subscriber base declined by 4 per cent in the past 9 months, while mobile subscribers grew by 37 per cent (against 85 per cent growth of private competitors in cellular). Its first 9-month (2003-04) rise in the revenue and earnings were 4 and 2 per cent respectively. Present customer care and retention initiative may, however, improve subscriber base, Mr Dua felt.

The PSU has been trying to achieve growth through extension of its geographical spread overseas. It recently obtained basic and ILD services licences in the Mauritius. However, there is a little delay in securing the mobile licence in Mauritius. The company is also eyeing Sri Lanka and Nepal markets.

However, some analysts positively recommended the stock on Wenesday following a clue provided in the BJP manifesto, which stated that it would pursue privatisation policy for the services units too. "It was a signal for possible disinvestments in the 56 per cent Government-owned MTNL. It raised expectation of an unusual dividend before privatisation for stripping by the Government," felt a market analyst. It has reserves of around Rs 8,000 crore and the last dividend was at 45 per cent. It has planned a large-scale VRS to reduce cost also.

More Stories on : Stock Markets | Stocks

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
ING Vysya to launch WTO theme fund

Bull onslaught

Sensex scores 150 on first day of new fiscal

MTNL shares rally on privatisation buzz

Fired by gas

Bank stocks riding on hopes of corporate credit offtake

Index futures catches on

Tata Power: Outlook positive, buy April futures

Foreign investors pump $10 b into forex kitty

SEBI yet to decide on loss in ONGC trading

SEBI extends ban on Samir Arora to 5 years

`Feel-good' factor fuels sentiment