BSNL IPO likely in the next fiscal

The government on Monday rapped state-owned BSNL for poor financial performance and made a case for disinvestment in the telecom PSU through an initial public offer.

"I hope BSNL IPO happens in the coming year (2010-11). I can't say exactly when, but I certainly hope that it does happen because BSNL does need to open up to public ownership primarily with a view to strengthen its own management and its accountability," disinvestment secretary Sunil Mitra told private news channel CNBC TV18.

The PSU has been negotiating with the adamant trade unions, which have been opposing any disinvestment as they (unions) feel that it (disinvestment or listing) would serve no interest of people.

The government had earlier proposed to divest 10 per cent stake in the telecom PSU and the same was felt at a recent review meeting chaired by Prime Minister Manomhan Singh.

"The company's financials are doing pretty badly and it certainly shouldn't be so because telecom as you know it is one of the sector that you have to be competitive and they (BSNL) have to pull up," Mitra said.

The government may announce a roadmap for disinvestment in PSUs through IPOs and follow-on public offer (FPOs) by March this year and BSNL could be one of the PSUs out of 60 companies identified by the government.

BSNL, which was eyeing a top slot in the mobile market at one point of time, is struggling to retain its fifth position in the market.

The company is also in process to add its GSM capacity at an investment of over Rs 35,000 crore (Rs 350 billion) and had floated the tender nearly 18 months ago but being a government-owned company it has been facing bureaucratic hurdles to place orders with the lowest bidders.

Disinvestment and listing would help the PSU to take decisions faster and compete with the private sector effectively and efficiently.