VSNL revises bonus ratio, finds little enthusiasm

NetScribes/Ganesh Ramamoorthy

Videsh Sanchar Nigam Limited (VSNL) shares shot to up an intra-day high of Rs 897.75, up Rs 66.45 from its previous close of Rs 831.30 at the Bombay Stock Exchange, following the announcement of a 2:1 bonus issue by the company.

However, at close of trading, the shares dipped sharply to close at Rs 840.30 as the market fell. A total of 175,000 shares were traded on BSE.

A BSE broker told NetScribes that though the bonus issue did have some impact in early trade, the gains were quickly lost due to overall selling pressure in the market. "There is little activity in the counter due to lack of interest," the broker said.

VSNL had earlier announced a 1:1 bonus issue. However, it revised the bonus ratio to 2:1 to meet market challenges. In order to be eligible for a licence to offer for domestic long distance (DLD) services, telecom companies are required to have a minimum paid-up capital of Rs 2.5 billion.

With the 1:1 bonus issue, VSNL's paid up capital would have increased from the current level of 950 million to Rs 1.9 billion - Rs 60 million lower than the required paid-up capital. The revised ratio, will increase the paid-up capital to Rs 2.85 billion.

In a notice to the stock exchanges, VSNL also said that the board has decided to increase the authorised capital from Rs 1 billion (divided into 100 million shares of Rs10 each) to Rs 3 billion.

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