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|December 8, 1997||
MTNL GDR is priced at Rs 235Mahanagar Telephone Nigam Limited and its joint global coordinators, Glodman Sachs, HSBC Investment Banking and Merrill Lynch announced last week the successful pricing of MTNL's global depository receipt issue in London.
The MTNL GDR is priced at Rs 235 per share, a 1.18 per cent premium on the domestic price.
It said that the pricing also signifies investors' confidence in India as an attractive destination for long-term investments.
Despite the hectic political development at home, Prime Minister I K Gujral's recommendation for dissolution of Eleventh Lok Sabha to President K R Narayanan, the GDR issue received an excellent response from international investors. The issue was received well by investors despite turmoil in the international capital market, the release added.
The price has been set at $11.958 per GDR (comprising two equity shares), equivalent to Rs 235 per share. Gross proceeds of the offering (excluding the over-allotment option) amount to $ 358.74 million, making it the third largest GDR issue from India to date.
The GDR pricing represents a 1.18 per cent premium on MTNL's closing price on December 3 on the Bombay Stock Exchange and a 4.29 per cent premium on Rs 225.33, the average price for the 10 days before December 3.
The issue evoked demand from around 500 investors from over 15 countries, the release added.
In the initial issue, 60 million shares have been sold with the provision for issue of an additional 2 million shares if the over-allotment option is exercised.
As a result of the GDR offering the government's holding will be reduced to 57.16 per cent from 65.73 per cent excluding the over-allotment 'greenshoe'.
MTNL's share capital has increased by 3.33 per cent to Rs 6,200 million with the issue of 20 million new equity shares and will increase to Rs 6,300 million if the over-allotment 'greenshoe' option is exercised.
Commenting on the success of the offer, A V Gokak, chairman, Telecom Commission, said, "The Government of India is very pleased with the encouraging response to MTNL's GDR issue, which endorses our belief in the fundamental strength of the company and its prospects. The success of the offering also demonstrates the continued attractiveness of India as an investment destination and investor confidence in the Indian telecommunications sector.''
Rajagopalan, chairman and managing director, MTNL commented: "MTNL is dedicated to expanding our relationship with all our stakeholders and creating outstanding value for our shareholders. We are at the threshold of new and exciting opportunities and are confident of continued expansion and growth of our businesses.''
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