Close on the heels of the successful American Depository Shares (ADS) issue of Satyam Infoway, the second largest internet access service provider in India, Videsh Sanchar Nigam Limited (VSNL) is planning to offer 25% of VSNL Seamless Services Limited (VSSL), a subsidiary, in the ADR market.
VSNL is the largest internet access provider in the country. It has recently transferred its internet related business to a new Subsidiary, VSSL. The new subsidiary is likely to become fully operational in about three months time.
India currently has 0.5 m internet users. This figure is expected to jump to 4.5 m in 2002, reflecting the strong growth potential that exists in India. To tap this demand, however, companies would have to vigorously invest in infrastructure. Another means of pursuing growth could be via mergers and acquisitions.
These measures to boost growth and compete effectively with virtually an army of contenders waiting to tap this boom would require access to large amount of funds. This obviously points to the American bourses, the Mecca for infotech stocks.
However, in case of VSSL, it is essential that the money raised be deployed within the company, rather than be utilised to finance the government deficit.
More Views on News
Sorry! There are no related views on news for this company/sector.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: firstname.lastname@example.org. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407