BSNL raises 8500 crore money via Indian Govt Guaranteed Sovereign bonds

The Indian Government has approved BSNL 8500 crore sovereign guaranteed bonds for the revival of BSNL public sector 

Public telecommunications in India Bharat Sanchar Nigam Limited (BSNL) issued 10-year government guaranteed bonds on a private placement basis. The bond received an overwhelming response from investors.

BSNL offered unsecured, redeemable, listed, taxable and non-convertible covered government bonds with a face value of Rs 10 lakh each at par, with a base issue size of Rs 1 billion with the option to hold the subscription up to a maximum of Rs 7,500 crore, adding the total issue size of Rs 8,500 crore, based on the private placement through BSE, Electronic Bidding Platform (EBP).

The bonds have been rated "CRISIL AAA (CE) / Stable" by 'CRISIL Limited, "CARE AAA (CE) / Stable" by CARE Ratings Limited and "BWR AAA (CE) / Stable" by Brickwork India Rating Limited. Instruments with this rating are considered to have the highest degree of security with respect to the timely service of financial obligations and have the lowest credit risk.

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The bids through BSE EBP took place in september between 10:30 am. and at 12:00. At the close of the tender, offers of Rs 17,183.10 million were received from 229 investors. The issue was underwritten over 2.02 times the total size of the issue and is the largest government-guaranteed bond issue in recent times, receiving such an overwhelming response. The coupon rate is also better than other similar offers in recent times.

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Sri. P K Purwar, CMD BSNL reported that the BSNL management has decided to keep the full subscription of Rs 8500 Crores at a coupon rate of Rs 6.79%. These bonds are expected to be listed on BSE soon and will be used to refinance debt and to meet BSNL's CAPEX requirement. He said the investor response indicates the high level of confidence of all investors, including banks (HDFC Bank, ICICI Bank, Axis Bank, State Bank of India, ICICI, Punjab National Bank), mutual funds, mutual funds pension, rural postal life insurance. etc. at the state-owned telecommunications service provider (BSNL).

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Obtaining government-guaranteed bonds of Rs 8500 Crores is part of the government's approval of the BSNL Revival package in October 2019, which also included VRS for 50+ employees, real estate monetization, 4G spectrum allocation and merger of MTNL with BSNL.