NRI investor C Sivasankaran has redialled into India's rapidly growing telecommunications market by acquiring a controlling stake in S Tel. Sivasankaran’s investment arm Sterling Infotech Group (SIG) has picked a 51% stake in the firm from its original promoters for Rs 1,150 crore, reports Economic Times, quoting sources.
Sivasankaran sold his stake in Aircel for $1.08 billion to Maxis Telecom in 2005. After this deal he entered into a non-compete agreement with Maxis Telecom which barred him from buying more than a 10% stake in an Indian telecom firm, which ended in March this year. In the meantime, Siva bought 8.6% stake in Tata Teleservices for Rs 1,200 crore in 2006, which fell to to 6% after Japan's NTT DoCoMo bought 26% stake earlier this year.
Siva, as Sivasankaran is popularly known in business circles, has bought the stake of Skycity Foundations and Mauritius-based Telecom Investments in S Tel. The real identity of these two firms, classified as private equity investors, is not known. S Saravana, Siva’s 22 year old son, has joined the S Tel board.
Earlier this year, S Tel sold a 49% stake to Gulf-based Bahrain Telecommunications Co (Batelco) and Millennium Private Equity for $225 million. Batelco has already picked up 36.9% stake in S Tel in first tranche, and expects to complete the transaction in coming months.
Then last month it was revealed that Subroto Roy's Sahara Group has picked up an 11.7% stake in S Tel, which would have bought the stake of Skycity and Telecom Investments to less than 40%. The ET report does not mention if Sahara group has sold its stake in the deal or is
it part of the SIG consortium.
SIG firm Siva Ventures Ltd holds nearly a 15% stake in listed Sahara group firm Sahara One Media and Entertainment Ltd.
S Tel has licenses to operate in 6 Indian states - Bihar, Orissa, Jammu & Kashmir, Himachal Pradesh, North East and Assam. The company can also provide broadband services across the country as it has a Category A ISP license.
Shamik Das, who was earlier with Bharti Airtel as COO, Bharti Telemedia (Southern Hub), has been appointed S Tel’s CEO.
Siva, one of the savviest investors, has made fortunes buying, turning around and then selling companies, making the best of India's booming economy in the last decade. Besides Aircel, he sold coffee chain Barista for $125 million to Italian chain Lavazza. He bought over for Rs 65 crore (~$15 million). He also started Dishnet DSL, which he later sold to Tata Communications in 2004. Another one of his investments was Tamilnad Mercantile Bank.
He currently has venture in areas like wind energy, shipping and logistics, engineering, food and agri-products, among others.