Telecom tower company Viom Networks Ltd is aiming to mop up around Rs 2,000 crore from abroad. Equity listing on the NYSE, LSE and SGX are being tapped for the exercise.
Gurgaon-based Viom with a tenancy ratio (number of tenants per tower) of 2.3 per tower and 42,000 towers is the second largest in the country.
“We have begun work on listing abroad. The US, the UK and Singapore are the preferred exchanges. It will take another six months for us to get things in order,” he told
Apart from Tata Teleservices Ltd, which holds 54 per cent; a consortium led by Kolkata-based Srei has 46 per cent but controlling stake in the Rs 5,000-crore Viom.
According to Kunal Vora, CFA India Telecom & Media Analyst, BNP Paribas Securities, the decision to list abroad would ensure higher valuation for the tower company.
“Compared to India, where tower company valuations are repressed (around six times the EBIDTA), it is 15-16 times EBITDA in the US,” he said.
Viom had an EBITDA (earnings before interest, tax, depreciation and amortisation) of approximately Rs 1,550 crore in FY-12 and Rs 1,900 crore in FY-13.
Business Trust Model The company, Kanoria said, might also look into the creating a “business trust” as an alternative way — for raising domestic fund. However, the model is yet to be allowed in India.
A ‘business trust’, is a legal entity that acts as fiduciary agent or trustee on behalf of a business entity for management and eventual transfer of assets to a beneficiary. In case of infrastructure asset-based companies, trust model is preferred in the developed market as it ensures a long-tem annuity-based return and lower tax incidence.
Viom, Kanoria said, was also open to PE placements if listing took longer time. The company would require fresh capital after next nine months, primarily for addition of 15,000-odd towers.
Setting up a tower will cost the company about Rs 12 lakh.
The company has brought down its debts by Rs 1,300 crore to under Rs 7000 crore (till September 30) in the past few quarters. “We will need capital for expansion purposes. Business will not be impacted because of capital requirements,” Kanoria said. Meanwhile, Vora pointed out that fresh capital would indicate that the company would either use it to repay debt or look for probable acquisition apart from expansion.