IPO of BSNL Is Coming R U Ready

Like light coming like a sliver from dark, thick clouds, the news that BSNL is planning to go ahead with the IPO, irrespective of the trade union, is exactly what the doctor has prescribed. With the primary market going through very tough times at the moment, the IPO of BSNL will be like the perfect dose of tonic. Touted to one of the biggest IPOs ever to have hit the primary market, it expects to raise $10 billion and the issue is expected to hit the floors within the next six months. If the plans of BSNL do manage to take off, then we will probably see the IPO of UTI Asset Management also getting revived. It had planned on a $480 million IPO and apart from the market conditions; it was the insistence of the FIIs wanting the valuations to be cut by a quarter which led to ultimate decision of postponement. What this means is that the FIIs are currently out of favour with the Indian equity markets. Apart from the overall global conditions, FIIs are wary about the weakening economic conditions in India, the rising inflation and the Govt coping with the rising costs by hiking interest rates. But maybe, the PSU IPOs could change the tide? Maybe if priced right, the PSU IPOs would help not just revive the Indian primary markets but also get back the FIIs, back to investing in Indian IPOs. Falling rupee, Govt runs for the rescue and now, falling markets, Govt runs to rescue too? And to ensure that the issue makes it to the marquee this time, the Union minister for communications and information technology Andimuthu Raja has offered the company’s more than 300,000 workers stock at Rs10 a share compared with the Rs300-400 he expects it to list at. Now that would be a bait hard to resist!

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