Tata Comm to raise $600 m in equity in three years

Our Bureau Updated - November 15, 2017 at 10:12 PM.

Tata Communications will raise $500-600 million (over Rs 2,500 crore) in equity over the next three years, said Mr Vinod Kumar, Managing Director and CEO.

The company, which celebrates the 10th year of its acquisition (as VSNL) by the Tata group, has invested over Rs 17,000 crore in building capabilities and entering new markets.

It has debt of over $1.5 billion on its books. But as the capex intensity for the company declines and internal accruals build up, the company will be able to look for the best options and timing to raise equity, he said. Tata Communications was not in a hurry to do this, but raising equity is on the anvil, said Mr Kumar.

From the next year onwards, the company will be able to feed its capex plans with its operating cash flows. And over the next four to six quarters, the company will be positive on a profit-before-tax basis, he said.

Currently, TCL is only EBITDA (earnings before interest, taxes, depreciation, and amortisation).positive and not PBT (profit before tax) positive on a consolidated basis as its south African subsidiary Neotel is still making net losses.

TCL would also be ready for both organic and inorganic expansion, said Mr Kumar.

Over the last 10 years, the company has grown from being just a wholesale voice provider to being in the forefront in voice, data and IP services, as well as having a presence in over 50 countries. Its employee strength has grown from over 3,000 to 7,800.

Going ahead, the company would concentrate on cloud services, in particular infrastructure-as-a-service; the other thrust areas would be business video and mobile brand band enabling services.

The capital expenditure for the next two or three years would be $200-250 million annually. This would mainly be spent on mobile broadband enablement and cable system upgradation, said Mr Kumar.

>kripram@thehindu.co.in

Published on February 13, 2012 17:04