BSNL IPO Expected By Late 2010
Disinvestment Secretary Sunil Mitra has given clear indications for the Bharat Sanchar Nigam Ltd. IPO (Initial Public Offering) to a private news channel. He says “I hope the BSNL IPO happens in the coming year (2010-11). I can’t say exactly when, but I certainly hope that it does happen, because BSNL does need to open up to public ownership, primarily with a view to strengthen its own management and its accountability”.
Various reasons are responsible for this IPO announcement. The poor financial performance of BSNL is one of them. The government may announce a roadmap for disinvestment in various other PSUs including BSNL through IPOs and follow-on public offer (FPOs) by March later this year and BSNL could be one of the 60 PSUs identified by the government for the disinvestment. However almost all the trade unions have been opposing any disinvestment. The unions say disinvestment or listing would serve no interest of people. The government has already proposed to divest 10 per cent stake.
BSNL which is struggling to retain its fifth position in the telecom market was once eyeing the top position in this war of telecom service providers. BSNL had floated a tender nearly 18 months ago for increasing it’s GSM capacity at an investment of over Rs 35,000 crore. And being a government-owned company, It has always faced various problems in placing bids with the lowest bidders (the reason for which is quite obvious). Now let us see if disinvestment and listing can help BSNL to compete with the private players and improve it’s position among the competitors.
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