MTNL's second GDR offering on Nov. 10

BANGALORE: The second divestment of government equity in the international markets will be held on November 10 with the GDR offering of Mahanagar Telephone Nigam Ltd. (MTNL). MTNL will offer 9.5 million GDRs, which correspond to 19.5 million shares, through which the government hopes to raise $100 million. Considering that the issue size is relatively small by international standards, the road shows will be restricted to select international financial centres, officials here said.

Issue pricing is likely to be finalized on November 17, they said. According to bankers and analysts, the issue should not pose much problem given the strengths of the company and the small issue size. MTNL is planning to convert its outstanding GDRs into ADRs during the first quarter of next year.

Through MTNL's first 35 million GDR issue in November 1997, the Government raised Rs 358.74 crore, of which there were no cancellations. This would mean that after the issue of GDRs, close to 45 million GDRs can be converted into ADRs under an exchange program. This will be a level two ADR program, which is listing in a US exchange without issue of fresh capital.