Govt hopes to raise $10bn from BSNL IPO

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New Delhi, August 7:: The government hopes to raise $10 billion in the country's largest-ever IPO through a share sale in state-owned telecoms BSNL, but will take a decision only after talks with trade unions, government officials said on Thursday.

The government had said in January it aimed to list Bharat Sanchar Nigam Ltd, or BSNL, but placed the plan on the backburner after the coalition's communist allies and trade unions opposed the move.

The sale plan got a boost after the ruling regime swapped the communists with a pro-business regional party as allies in July.

Telecoms Minister Andimuthu Raja said the board of BSNL, India's top telecoms firm, had approved the IPO proposal, and he had asked the firm to negotiate with the unions.

"After that the government can come to a conclusion what type of decision can be taken," Raja told a news conference, adding there was no time-frame set.

BSNL's 304,000 employees have been offered 500 shares each at 10 rupees a share, while the IPO would be in a range of 300-400 rupees ($7-$9.5) per share, the minister said.

But the chief of the BSNL employees' union rejected the government's offer and said the opposition would continue.

BSNL is India's top-ranked telecoms firm by subscriber numbers but in mobile services lags Bharti Airtel Ltd, Reliance Communications Ltd and unlisted Vodafone Essar, which is controlled by Vodafone Plc.

At the end of June, BSNL had nearly 73 million wireless and fixed-line subscribers, slightly ahead of mobile services leader Bharti Airtel that had nearly 72 million users.

In January, BSNL's director of finance, S.D. Saxena, had said the firm valued itself at $100 billion, and was looking at selling 10 percent to the public.

On Thursday, Saxena said BSNL was "still very aggressive" on the valuation and cited the $21 billion valuation Vodafone gave to Hutchison Essar in 2007 when the British firm bought a controlling stake in the Indian operator.

"This company is 5-6 times bigger," Saxena said. Merchant bankers had not yet been appointed for the IPO, he said.

Indian shares have lost a quarter of their value this year, and IPO plans of about $4.1 billion have been deferred. Analysts say the weak sentiment could limit investor appetite for large offers.