Venture capital-backed mobile value added services firm One97 is planning to raise Rs 120 crore through a public float to purchase telecom equipment and software for installation at its office as well as various client sites.

Promoted by Vijay Shekhar Sharma, One97 counts amongst its investors SAIF Partners, Intel Capital and Silicon Valley Bank (SVB). In fact, SAIF Partners holds 41% in the company (that will get diluted to 36.7% after conversion of preference shares owned by other financial investors before the IPO) and is just marginally short of promoters holding of 43%.

Intel Capital does not own any shares as of now but after conversion of preference shares would hold 9.7% before IPO. SVB is hiking stake from 2.7% to 3.5% ahead of the IPO through the convertible preferenmce shares route.

If the latest share transaction is any indication, the company could be looking at an equity dilution of up to 21% in the issue that is being managed by IDFC and Avendus. In February this year, the promoter had sold as much 0.6 million shares to SAIF at a price of Rs 175 a piece.

SAIF has invested a total of Rs 78.18 crore to acquire stake in the company of which Rs 32.68 crore went to the firm and the remaining Rs 45.5 crore to shareholders from  whom  it bought shares early this year. Its average cost of purchase is pegged at Rs 84 a piece as per calculations by VCCircle.

If the equity transaction early this year is a benchmark for the issue price it could be sitting on unrealised gains of a little over 100% on its investment of which the first tranche was made three years ago. SVB will also be sitting on a similar unrealised returns having invested a total of Rs 7.73 crore with an average cost of acquisition of around Rs 86.5 per share.

Intel Capital has picked the shares(after conversion of the preference shares) at Rs 174 a piece almost the same price at which the issue could hit the market.

One97 had total income of Rs 86.7 crore for the nine months ended December’09 largely from sale of services. In the same period it clocked consolidated net profit of Rs 12.4 crore.

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