Net4 India Limited, a Bombay Stock Exchange-listed network and application services provider, has raised Rs 8 crore from QS India Hosting, an investment arm of Quilvest group, an international private equity firm listed on the Luxemborg stock exchange. The PE firm has allotted 693620 equity shares on a preferential basis at a price of Rs 116 per share (including premium of Rs 106 per share) for an aggregate amount of Rs 80.46 million. Quilvest Group also has an indirect investment in SKS Microfinance, the country’s largest MFI, through its investment in Kismet Capital.
“We basically have a capex plan of Rs 70 crore over the next three years. The idea was to have the right mix of equity, internal accruals and debt to fund our investment plans,” Jasjit Sawhney, Founder, Chairman & CEO, Net4 India Limited told VCCircle explaining the rationale behind raising money.
The company had previously raised $3.19 million from Madison India Capital Advisors and $1.87 million in second round from Granite Hill India Opportunities Fund. The existing investors stay invested and have not exited in the current round of financing.
The company is planning to set up a 30,000 sq, ft data centre in Chennai. It operates seven small format data centres and will also look at increasing the overall capacity, entailing an investment of Rs 50 crore. The remaining Rs 20 crore would be deployed in adding MPLS (Multiprotocol Label Switching (MPLS) and VPN (Virtual Private Network) to their service portfolio.
"We have been growing on a 35-37% compounded basis and we would continue to grow in that direction. We are likely to make significant investments which will reap rewards,” Sawhney added.
On any inorganic growth plans on the radar, Sawhney said that “there could be possibilities around data centres, web hosting and internet space, but nothing that is on the cards”.
Net4 India claims to have revenues to the tune of Rs 195 crore (2009-2010). Its offerings include internet bandwidth services, data centre solutions, VoIP solutions, and enterprise messaging & hosting solutions. Its clientele includes CNBC TV18, Essar, Godrej, Hutch, ITC, L&T, Lufthansa, NIIT, ONGC, Proctor & Gamble, Reliance, Sahara, SBI, Siemens and TCS.