The issue is awaiting government clearance. |
State-owned Bharat Sanchar Nigam Ltd (BSNL) is preparing for the country's largest initial public offering (IPO) of around $10 billion (Rs 40,000 crore) slated sometime next year. |
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The issue has been discussed by the board and is awaiting government clearance. |
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The plan is to divest 10 per cent through the IPO, which values India's largest telecom company at $100 billion (Rs 400,000 crore), which is larger than the combined market capitalisation of Bharti Airtel at $46 billion (Rs 183,283 crore) and Reliance Communications (RCom) at $41 billion (Rs 163,683 crore), respectively the second- and third- largest telecom companies. VITAL STATS | Revenues | Rs 39,715 crore* | Profit | Rs 7,805 crore* | No of subscribers | 65.3 million | * 2006-07 | |
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The announcement comes a day before the $3 billion (Rs 11,500 crore) IPO by Reliance Power, owned by the Anil Dhirubhai Ambani Group, the largest initial share offering to date. |
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The plan that it might go public was announced by Communications Minister A Raja on the sidelines of a press conference at which BSNL announced an insurance cover for 33.7 million of its subscribers. |
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Added BSNL's Director (Finance) S D Saxena, "DoT asked the board about an IPO and we have given our views . Our main aim for the IPO is to benchmark the company against others. The money will be used for expansion." |
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Saxena said while the process might begin in two to three months, the issue would probably open a year down the line, subject to government approval. |
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The company's expansion plans were delayed following a controversy over an order for 45 million GSM mobile lines under former Communications Minister Dayanidhi Maran, who was replaced by A Raja last year. |
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Objections by equipment suppliers on the way the contract was awarded prompted Raja to reduce the order size to 22.5 million GSM lines only for second-generation (2G) services, which was awarded to Swedish group Ericsson. |
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BSNL is a pan-Indian telecom service provider, except for Mumbai and Delhi which is serviced by state-owned MTNL. |
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The company's 2006-07 revenue was Rs 39,715 crore and net profit Rs 7,805 crore. It has over 65.3 million customers, in both fixed-line and wireless subscribers. |
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Bharti Airtel has over 50 million subscribers, mostly in GSM mobile services. RCom has 40 million subscribers, mostly in CDMA mobile services. |
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