Biggest IPO to hit the Indian capital markets

HIGH STAKES: Government will move ahead with the IPO only if the unions are on board.

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Keywords: ESOP, BSNL

A top BSNL official has told CNBC-TV18 that the much awaited IPO may happen by the end of this fiscal.

But the unions continue to oppose the IPO despite an attractive ESOP offer made by the government today.

It will be the biggest IPO to hit the Indian capital markets. But the 40,000 crore BSNL stake sale has to overcome a number of road blocks - principally, opposition from trade unions.

Telecom minister A Raja offered employees stock options to sweeten the deal.

The meeting could have paved the way for a 10 billion dollar mega IPO, but it ended with BSNL Employee Unions rejecting the government's ESOP sweetener even as Minister Raja played mediator for the first time.

Communications and IT Minister said A Raja said that the BSNL chairman offered all employees 500 shares at Rs10 each and even gave an indicative listing price of Rs 300 to Rs400.

He also said that the package was offered in view to compensate whatever the apprehensions with regard to social security and employment security and said that all this could be addressed in a proper manner.

He added that he has given them some time to discuss but did not give any time frame

However, the offer cut no ice with the unions.

General secretary BSNL Employees Union, V.A.N Namboodiri, said, “We have opposed it with tooth and nail. Any offer of 500 shares or 100 shares is not going to change it. Our workers very well know that this is a bait.”

Raja has indicated the government will move ahead with the IPO only if the unions are on board.

The BSNL's management is not giving up yet. Its finance director told Network 18 that an IPO is likely before the end of this fiscal and the issue price will be above 300 rupees.