Bharat Sanchar Nigam Limited (BSNL) is looking to raise money through a bond issue in the near future. The state-run telco is aiming to raise about $518.98 million or Rs 43 billion through bonds. BSNL needs money to roll out 4G throughout India. This bond issue will carry an irrevocable guarantee from the Indian government, which would attract more investors.
According to a Republicworld report (inputs from Reuters), BSNL is preparing to issue 10-year government-guaranteed bonds in March 2024. The telco is expected to invite bids from banks and investors in the coming days to take the process ahead. The bonds will carry a AAA (CE) rating from Crisil. This is because of the unconditional and irrevocable guarantee from the central government. The rating from Crisil would mean more people would be interested in investing in the bonds.
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To recall, the last time BSNL raised funds through bonds was in December 2022. The state-run telecom operator raised Rs 41.85 billion back then and it had a similar 10-year structure as the one BSNL is planning to offer in the upcoming bond issue. The previously issued bonds carried a 7.72% semi-annual coupon and garnered a good response from the market.
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The report said that as of March 4, the state-run telco has only announced its intention to proceed with the bond issue. Other details related to the issue are not out yet and will be finalised in the coming days. With the government's backing, the bond issue from BSNL will certainly be an attractive proposition for the banks and the investors. It will be interesting to see what happens with the bond issue. For now, the state-run telecom company is trying to rollout 4G as soon as possible to ensure that it can compete with the other telcos.
