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Viom Networks mulls overseas IPO; PE investors may part or fully exit

Private equity investors, apart from Kanoria family-owned Srei Infrastructure and Tata group's loss-making arm Tata Teleservices, are exploring options to fully or part exit the Gurgaon-based telecom tower company Viom Networks Limited, which is looking to raise capital to fuel its growth plans, Srei Infrastructure vice-chairman Sunil Kanoria told the Business Standard.

The route of proposed stake sale has not yet been decided, but media reports suggest that Viom Networks that owns and operate more than 42,000 towers in the country is looking to raise capital either through stake sale or an offshore listing either on London Stock Exchange or New York Stock Exchange.

Presently, Tata Teleservices owns 54 per cent stake in Viom Networks, Macquarie SBI Infrastructure, GIC Investments, IDFC Private Equity and Funderburk Mauritius together hold 28 per cent stake, while the remaining is held by Srei Infrastructure.

The newspaper said quoting Viom Networks’ CEO Syed Safawi that the company was looking at an overseas listing and is expected to take a final call on the route to raise capital by the end of the second quarter of fiscal 2014-15.

“To propel growth for the next three years, we need to raise capital. We have appointed Credit Suisse and Citigroup as bankers to help raise Rs 1,500 crore," Safawi said.

On the other side, reports also suggest that PE players like the US-based Carlyle Group LP and Malaysia's Axiata Group Bhd, apart from tower operator American Tower Corp, are among the possible bidders that have shown interest to own controlling equity holding in the Gurgaon-based Viom Networks.

While Macquarie SBI Infrastructure picked 11 per cent stake in Viom Networks for $304 million in 2010 and is expected to get a good return on its exit, IDFC Private Equity has been an investor in Viom Networks since 2008 and re-invested in 2009. Tata Teleservices may also look at selling a part of its stake in Viom Networks as it needs capital to buy back stake from Japanese partner NTT DoCoMo Inc by or in June this year.

Tower companies in India earn revenue from leasing out their infrastructure to mobile phone operators. Most recently, Viom Networks, which counts Indian unit of Norway's Telenor ASA as its biggest customer, inked a tower sharing pact with Reliance Industries Ltd which is yet to launch its 4G services.

In the fiscal ended on March 31, 2014, Viom Networks earned revenue of Rs 5,300 crore with a net profit of Rs 120 crore. At the end of March 31, the company had a debt of around Rs 6,500 crore.

(Edited by Joby Puthuparampil Johnson)

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