SREI Group-promoted Quippo Telecom Infrastructure Ltd is planning to raise $300 million through fresh issue of shares, reports Economic Times. Quippo Telecom recently merged with Tata Teleservices tower arm, Wireless-TT Info-Services (WTTIL). The merger involved Quippo picking up a 49% stake in WTTIL for Rs 2,400 crore with management control of the combined entity. Quippo may raise funds by issuing shares to existing private equity investors or to new strategic investors.
Quippo has applied for Foreign Investment Promotion Board (FIPB) approval for both the merger with WTTIL and investment. It had to seek FIPB's approval for merger as overseas investors hold more than 49% stake in the company. The fresh investment will happen once the merger is completed.
The new round of funding will come at a time when telecom tower business across the country is rapidly consolidating. Essar Telecom Infrastructure was last week reported to be in talks for a merger with Tata-Quippo. The merged entity of Tata-Quippo has around 21,000 towers and is the largest independent tower firm in the country. It may now look to acquire smaller players in order to further strengthen its position.
Also the valuation of each tower and cost of manufacturing a tower has seen a significant fall due to slowdown in economy and falling prices of steel. Quippo is also planning to expand its network by adding 900-1,000 towers a month.
Quippo has raised several rounds of private equity funding from investors which include investment firm DB Zwirn, sovereign wealth funds Singapore’s GIC and Qatar’s Oman Investment Fund, IDFC Private Equity, Swedfund International AB, among others. The firm raised its last round in August 2008 where it raised $185 million from a consotium of investors.