India plans to push ahead with listing Bharat Sanchar Nigam, the state-owned telecoms group, in what would be the country's first large privatisation since the government came to power four years ago.
SD Saxena, finance director, said BSNL wanted to offload a stake of 5-10 per cent in a deal that it claims would value the company at about $100bn. That could make the transaction India 's biggest flotation.
India 's telecoms minister Andimuthu Raja told reporters on Thursday he had asked the board of BSNL, which has approved the plan, to negotiate with unions over concerns that a listing could lead to job losses.
The sale of the company, India 's fourth-largest mobile operator, has been made possible by a political dispute between the ruling coalition, led by the Congress party, and its former Communist party allies in parliament.
Last month, the Communists, who are opposed to privatisations, split with Congress, opening the way for the government to begin a long-delayed programme of stake sales in state-run companies.
Kunal Bajaj, a director at research firm BDA Connect, said BSNL had been in the running for privatisation but this was the first time during the tenure of the current government that a deal could go through.
"Now that the left is out of the government, there is definitely a much higher likelihood of this happening," he said.
But he cautioned that present market conditions did not favour such a large offering.
India is the worst performing emerging market in the world this year. The benchmark Sensex Index, which has hit highs of 21,000 points, is hovering around the 15,000 mark.
Overcoming union objections could also be difficult. There were reports on Thursday that employees would be offered stock as part of efforts to persuade them to agree to the deal.
Another question mark is over the company's valuation. BSNL's market position has been eroding fast - it was the number two mobile operator less than two years ago.
