New Delhi: State-owned Bharat Sanchar Nigam Ltd (BSNL) on Monday said it plans to raise about $10 billion through its Initial Public Offer, which is expected to come out in a year's time.
"Up to 10 per cent dilution will be made that will raise about $10 billion (about Rs 40,000 crore)," said BSNL Director (Finance) SD Saxena. The market valuation of the telecom giant is about $100 billion, he added.
Talking about the size of the IPO, Saxena said, "$10 billion can be a good size to test the market that will set the benchmark for going global." The IPO will take a year's time and the process will be initiated in 2-3 month's time.
"The government will take the final call as this is a state-owned company," Saxena said. The fund will be used for expansion of network and services.
''We have enough funds to fulfill immediate requirements but the funds will help us in our future expansion of network and services," Saxena said. He said this was the most appropriate time to launch an IPO with huge amounts of Foreign Direct Investment coming in.
Saxena said the whole exercise of IPO is likely to begin in the next 2-3 months and would be completed within a year. He, however, said the government has to decide on the public issue and everything would depend on its policy.
The government had asked for the company's opinion on IPO and it has forwarded its reply, he added. Asked whether merchant bankers have been appointed for this, he said: "Not yet."
BSNL is also planning to issue fresh tender for about 10 million GSM lines very soon after Nokia Siemens Networks refused to accept its share over price differences. The PSU had earlier floated a tender for 22.5 million lines, 60 per cent of which was awarded to Swedish giant Ericsson and remaining to Nokia Siemens.
The company has been losing market share to private opeartors in the GSM mobile segment for some time now because of capacity constraints and the delay in the tender process.
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