MTNL's GDR float to hit market by October end

BANGALORE, September 10: Mahanagar Telephone Nigam Ltd. (MTNL) proposed

disinvestment of 19 million government shares would hit the market by the

end of October. Chairman-cum-managing director S. Rajagopalan said that no

decision had been taken on whether to divest part of the equity in the

domestic market along with the GDR.

The earlier $358.74 million GDR in November 1997 was issued at $11.96

per GDR. It is now quoting at $10.18 (equivalent Rs 221.47) and is trading

at a premium of around 16 per cent to the current domestic price of Rs

188. The GDR consisting of 2 shares is trading at a 14.6 per cent discount

to the issue price.

During the past five months, the MTNL scrip on the domestic bourses has

been moving in a narrow range of Rs 180-210. The Cabinet had decided to

divest up to 19 million shares in MTNL through an institutional offering

in GDR or in the domestic market with an expected revenue in the range of

Rs, 400 crore. Earlier, the Disinvestment Commission had recommended that

MTNL divest 60 million shares in the GDR market and 28.3 million shares in

the domestic market.