Refusing to divulge details of the company's strategy on the GDR issue, which is planned at one-third of the 1997 GDR issue amount, he said the core group would decide on all these aspects.

However, dropping enough hints to suggest that lead managers of the last issue may not be retained for the current issue, he said, "it is not mandatory to retain the merchant bankers of the last issue for every subsequent issues". He said the option of offering a domestic issue along with the GDR was also under consideration and thecore group would decide it along with the employees stock option plan. VSNL sources said the GDR issue to sell off about 10 per cent of government stake would be aimed at generating 180 to 200 million dollar of foreign capital as against the 526 million dollar mobilised during the last issue.

Kleinvort Benson, Salomon Brothers and Jardine Flemming were the lead managers for the first GDR issue completed in September 1997, which was the largest GDR issue so far from India and the first government divestment in GDR form. After the issue, the government was left with 64.97 per cent equity in the Rs 95 crore paid up capital of VSNL, while Indian banks and financial institutions have a share of 10.33 per cent.

FIIs have a 3.45 per cent stake in the company, GDR stock accounts to 19.89 per cent and 1.36 per cent is held by the Indian public. The cash-rich company, which has a debt-to-equity ratio of 0.085 and with very high internal accruals, has decided to go for another GDR issue to meet its Rs 5000 croreexpansion programme begun in 1997.

The company is planning to shift its entire traffic to asynchronous transfer mode (ATM) from the existing synchronous digital hierarcy (SDH). It has began preparations for floating global tenders for setting up an ATM system linking six major cities in which networking majors such as Ericsson, Seimens and New Bridge are expected to participate.

VSNL has invested in ICO global mobile telephoney project and planning investments in other similar projects. It has also invested heavily on the fibre-optic line around the globe (FLAG) and signed up for making an investment of 50 million dollar in the South-Africa Far-East (SAFE) cable system.