Videsh Sanchar Nigam Limited
25 August 2000


LETTER TO COMPANY ANNOUNCEMENTS OFFICE



                  Sub : Bonus Shares in ratio of 2:1

This is further to our letter No.HQ/CS/CL.24B/7689 dated 24 August 2000 wherein
we have informed convening of emergency Board Meeting on 25 August 2000 to
consider various options to increase paid-up capital and for recommending to
shareholders, resolutions regarding increase in Authorised Capital of the
Company of Rs.100 Crore divided into Ten crore shares of Rs.10/- each and Issue
of Bonus Shares at a higher rate than already approved.

2. The Board earlier at its meeting held on 27 July 2000 had recommended bonus
shares in the ratio of 1:1 with which the paid up capital would have become
Rs.190 crore.

3. Since, the Government has come out with the policy on licensing for Domestic
Long Distance (DLD) services and one of the criteria for DLD licence is to have
a paid-up capital of not less than Rs.250 Crore, it became essential for VSNL to
consider increasing its paid up capital from current level of Rs.95 Crore to a
suitable level to be eligible to apply for DLD licence.

4. The Board at its emergency meeting held on 25 August, 2000 considered various
options to raise its paid up capital and decided as follows:

a) to recommend to the shareholders resolutions regarding increase in
Authorised Capital of the Company from Rs.100 Crores (divided into Ten crore
shares of Rs. 10/- each) to Rs.300 Crores (divided into Thirty crore shares of
Rs.10/- each) and
b) Issue of Bonus Shares at the rate of 2:1 i.e. two new shares for each
existing shares.

4.  These decisions are in supersession of earlier decisions of the Board at   
its meeting held on 27 July, 2000 and communicated to stock exchanges vide
letter No.HQ/CS/CL.24B/7629a dated 27 July 2000.


LETTER FROM VIDESH SANCHAR NIGAM LIMITED