MTNL's board clears NYSE listing by Mar 15

Mahanagar Telephone Nigam Ltd's (MTNL's) Rs 1,000-crore bond issue is being pegged at a coupon rate band of 10-10.75 percent. The details were finalized at a board meeting held in Delhi on Thursday. The other items on the agenda which were cleared included the cellular project, delegation of powers, and the proposed NYSE listing by March 15.

MTNL's board clears NYSE listing by Mar 15 

Top sources said that this was a sign of the progressive softening of interest rates in the last few weeks. This is significantly lower than the recently floated Power Finance Corporation's (PFC) Rs 300-crore issue at 11.9 percent and Steel Authority of India Ltd's (SAIL's) Rs 500-crore bond issue at 12 percent.

The sources said that MTNL is raising Rs 500 crore, with a green-shoe option of another Rs 500 crore through the book-building route. The five-year paper is a three-year put-and-call option and was floated on March 1. MTNL plans to raise an additional Rs 1,000 crore within this fiscal. The modalities of the issue are yet to be finalized. The company is raising Rs2,000 crore for the Department of Telecommunications (DoT). The funds are meant for expansion plans and the implementation of current projects.

The bond issue is unique, as it is the first to be on the Internet. Theinformation memoranda of the issue will be addressed to prospective investors through their e-mail addresses and, likewise, the bids will be accepted through e-mail.

But at the same time, since all investors do not have e-mail access, the bids can also be made on the usual hard copy. The hard copy of the bond issue is necessary at the moment, as Cyber laws are not in place in the country and signatures are recognized if they are on paper.