BSNL may go for listing, to shelve divestment plan

Fearing opposition by employee unions, the government is considering listing telecom major BSNL on bourses by issuing nominal fresh shares and may shelve plans of directly divesting its equity for the time being.

Repeated attempts by the government and also management of the PSU have failed to bring the different associations to consensus on divesting government stake, even as they (employees) have been lured with employee stock options at an attractive terms.

“We may first list BSNL on stock exchanges and then go for disinvestment,” a senior government official told PTI.

BSNL’s valuation has been pegged at about $100 billion and the PSU has a paid up capital of about Rs 5,000 crore.

The PSU has reported a lower net profit of a little over Rs 574 crore, with total revenues of about Rs 36,000 crore during 2008-09.

Its revenue and net profit in the previous financial year were Rs 38,000 crore and Rs 3,000 crore, respectively. The sharp erosion in both revenue and profits is mainly due to lower average revenue per user (ARPU) vis-à-vis the private operators and if the trend continues for a few years, the company’s long-term plans may suffer badly.

Asked when the decision may be taken to raise fresh equity, the official said the timing and quantity of fresh equity to be raised for the purpose of listing is yet to be decided.

BSNL has a subscriber base of a little over 50 million, whereas private operators like Bharti Airtel and Vodafone Essar have moved ahead much faster in recent months. In fact, Airtel announced the 100-million mark more than two months ago.

The PSU has been adding 0.50 million users on an average for the last three to four months, BSNL officials had said, adding the company was making efforts to increase the incremental subscriber base to at least one million every month.

The company is in the process of adding its GSM capacity by massive 93 million lines, for which the financial bids have already opened and BSNL may place orders soon with the equipment suppliers.

Telecom Minister A Raja could not be contacted for comments on what would be the impact of this decision on the overall disinvestment policy of the government.