MTNL to raise Rs 1,000 cr. in bonds

NEW DELHI: Mahanagar Telephone nigam Ltd. (MTNL) plans to raise Rs 1,000 crore from the market out of which Rs 500 crore will be through issuing bonds and the other Rs 500 crore will be through the green shoe option.

The issue has been placed in line with the requirements of DoT which has asked MTNL to raise Rs 2,000 crore. The other Rs 1,000 crore of DoT’s requirements will be fulfilled through issuing separate bonds at later date. The current issues will be raised through the book-building route. SBI Caps is the advisor and book-runner for this private placement. The issue is backed by government guarantee and MTNL has asked for bids in the coupon range of 10 to 10.75 per cent per annum for a five-year maturity period.

The interesting aspect of the bond issue is that the exercise has been conducted through the Internet with the help of Satyam Infoway, which designed the Web site. The Web site named www.mtnlbonds.com will build the book automatically in real-time. The website consists of exhaustive information related to the bond issue including the Information Memorandum for Private Placement, the bidding document, and FAQs. The contents of the site will be available only to the 120 authorized users who are mostly institutional investors. The user name, access and pin-code provided to investors are not transferable in order to access information or to bid for bonds through the site.

Speaking about other initiatives of MTNL, CMD S Rajagopal mentioned that the company was also considering buying stakes in a number of telecom software companies. Although no details were divulged, it is understood that the first round of talks with a number of companies are through. MTNL is ready to invest up to 49 percent in these companies. It was also in talks with Rediff and Satyam to improve the contents in its site.

On the proposed launch of the GSM services by the middle of this year, the MTNL chief said that the company was committed to launch the service in time. Targetting the service at the upper middle class, the company would initially also sell handsets along with the connection. Answering questions on the company’s proposed cellular entry’s in the other two metros of Chennai and Calcutta, Rajagopalan said that it depended on the political will of the Central Government.