Private flows touch $10 billion

The first, a $ 125 million GDR issue by the Steel Authority of India (SAIL), the largest listed company on the Bombay Stock Exchange, met with muted responsefrom investors. It was the first time that a state-owned Indian enterprise had been listed on the London Stock Exchange. However, the government still controls about 85 per cent of the company’s equity.

The second, the State Bank of India’s 370 million dollar deal through a Rule 144A placement, was the largest equity offering ever from India and the first Indian listing on the New York Stock Exchange. The public issue of Videsh Sanchar Nigan Limited (VSNL), the state-owned telecommunications company, which after several postponements finally came to the market in the first quarter of 1997, raised $ 527 million, making it India’s largest deal to date, the bank said.

Pakistan saw many large deals postponed or cancelled, including the sale of its telephone company, Pakistan Telecom, and United Bank, the second largest commercial bank. The sale of the Kot Addu power station was concluded, however, bringing $ 215 million from a foreign investor, it said.

External long term debt of South Asian countriesincreased to $ 139 billion in 1997, up slightly from 1996 due to disbursements from official creditors.Despite recent increases in private flows, particularly to India, official creditors continued to account for most long term debt (75 per cent in 1997). The share of multilateral debt in total official debt has increased in recent years, from 44 per cent in 1990 to 55 per cent in 1997, the bank added.