The Hindu Business Line : BSNL plans to divest up to 10% for expansion

NEW DELHI: State-owned telecom firm Bharat Sanchar Nigam Ltd (BSNL), which has been valued at over $100 billion (Rs 4 lakh crore), is considering an IPO to dilute up to 10 per cent of its equity to fund expansion plans.

"We will look into it... The Department of Telecom (DoT) will discuss the issue and take a decision," Mr A Raja, Telecom Minister said here. He, however, refused to give any time schedule for coming out with an Initial Public Offer (IPO).

BSNL's revenue stood at Rs 39,750 crore in 2006-07, with net profit of Rs 7,805 crore.

The PSU has an immediate investment plan of Rs 15,000 crore to expand its GSM mobile network across the nation. Going by the valuation of the company, 10 per cent dilution may give the PSU up to Rs 20,000 crore, according to Mr S D Saxena, Director (Fin ance), BSNL.

Some officials, however, said that depending on the market conditions at the time of IPO, the collection from the IPO could even double to Rs 40,000 crore.

Asked how much funds were required for expanding the network, Mr Saxena said the current round of expansion would be met through internal accruals but an IPO could help increase the network through length and breadth of the country, especially in the rur al areas where private operators have shied away from setting up operations. - PTI

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