PE-backed Viom Networks defers INR1,000 crore IPO to next year

Telecom TowerTelecom infrastructure player Viom Networks has deferred its plan of stock market listing citing sluggish market conditions. According to a report by Economic Times financial daily, the Gurgaon-based company has pushed back its IPO plans to March 2016. Earlier, Viom Networks was planning to list by December 2015. A final decision regarding the timing of stock market listing will be taken in a board meeting scheduled for late August.

Viom Networks was recently in talks with American Tower Corp (ATC) to sell controlling stake to the latter but talks have fallen through over differences in valuations. ATC was reportedly valuing Viom Networks at around INR21,500 crore, well below the INR25,000 crore the Gurgaon-based player was seeking.

Even if the board decides on an IPO, it is unlikely before March 2016 as market conditions are not favourable now

– Sunil Kanoria, Vice-Chairman & Managing Director

Viom Networks was earlier planning to launch its IPO by December 2015 with an aim to offer 4-5% equity shares and raise INR1,000 crore. The company was aiming to command a valuation of INR25,000 crore through the listing. The IPO would have given the company some cash to fund its expansion plans while also allowing an exit to existing investors. Tata Teleservices owns 54% stake in Viom Networks while another 18.5% stake is with Srei Infrastructure. The company claims to enjoy strong equity support from other investors including Macquarie SBI Infrastructure Fund-led consortium, GIC Investments Pte Ltd Singapore, IDFC Private Equity and Funderburk Mauritius Ltd (Oman Investment Fund).

Breathing space

Meanwhile, a company executive has said the company is placed comfortably with annual EBITDA of INR2,000 crore and thus, is in no “tearing hurry to do the IPO”. Viom gets 40% of its revenue from Tata Teleservices, while the rest comes from Uninor, Aircel and Vodafone India.

However, internal accruals can only offer some breathing space to the company as telecom is increasingly becoming a capital intensive space. With the impending entry of Mukesh Ambani’s Reliance Jio, existing players have already beefed up their capital investment plans. According to Viom’s own estimates, there will be an additional demand of nearly 2 lakh data sites over the next 18 months.

With a portfolio of more than 42,000 telecom towers, Viom is a leading player in the telecom infrastructure industry but plans to add another 2,000 towers in its network during FY2015/16. The company posted profit before tax of about INR250 crore on a top line of INR5,000 crore in FY 2014/15.

Krishna Bagra

Coming from a family of investors and financial analysts, Krishna learnt wading through regulatory filings pretty early in her career. At IPO Central, Krishna plays twin roles of contributor and head of research desk. She can also be reached at +krishnabagra .

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