Videsh Sanchar Nigam Ltd. (VSNL) is mulling a move to demerge all its Internet-related businesses to India Seamless Services, a wholly owned subsidiary. This was reported by a leading financial daily.
VSNL is India's monopoly provider of international voice telephony and the largest internet service provider (ISP) in the country. As at September 30, 1999, it had 285,000 internet subscriptions.
Revenue break-up in 1HFY2000
VSNL has been advised by several legal consultants to go ahead with the demerger. The apparent benefits to VSNL will accrue in the form of tax sops. Althoiugh it has not decided the methodology, it is mulling several ways to effect the demerger- one of which is to transfer all Internet-related assets to the new subsidiary. Apart from the Internet business, it may all transfer all Internet-related businesses. Apart from the tax benefits, another allure for the company is the increasing appetite for Indian infotech companies in the US investment community.
VSNL's move to hive off its Internet business will unlock value for its shareholders. In view of looming competition and shrinking margins in its international telephony business, future growth for the company will come from value-added services, particularly Internet. After Satyam Infoway's American Depository Receipt (ADR) listing, analysts are very bullish about VSNL's Internet business should it decide to go for a listing on overseas bourses.
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: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407