IPO gone sour, Ortel eyes rights issue & PE funding

MUMBAI: Ortel Communications, Orissa?s leading multi-system operator (MSO), has abandoned its Rs 1 billion public float plans due to choppy market conditions and is scouting for private equity investment while deciding to do a rights issue to take care of its interim funding needs.

The company has mandated Equirus to find an investor and is looking at raising Rs 1 billion. Equirus had earlier helped Ortel to get private equity fund New Silk Route which had bought 23 per cent stake from the promoters for Rs 600 million and additional equity from Actis to take its total holding to 35 per cent.

Ortel plans to invest Rs 500 million over two years for its digital and new territory expansions. The MSO has cable TV operations in Orissa, Chhatishgarh, parts of coastal Andhra Pradesh and West Bengal.

The funding will be through a mix of rights issue and debt. The existing shareholders will be participating in the rights issue. Ortel promoters currently hold 63 per cent stake in the company, after buying out SREI Group?s equity in 2008. New Silk Route has 35 per cent stake and the balance two per cent is with the employees and others.

?We are looking at a rights issue and the two existing shareholders have agreed in principle to subscribe to it. Post the issue, the shareholding will be almost the same. We have a funding requirement of Rs 500 million over 12-24 months depending on our growth and we will do this with debt and the funds that we raise from the rights issue,? Ortel CEO Bibhu Prasad Rath tells without disclosing the size of the rights issue.

The company has parallelly started looking for private equity investment. ?We got Sebi clearance for the IPO (initial public offering) last August but have decided to shelve it due to market conditions. We will have to file again as the one-year period is getting over (companies have to tap the market within a year of Sebi clearance or it expires). We will wait until conditions in the market improve before taking any such decision. We have mandated Equirus to find us a private equity investor at the right valuation,? says Rath.

Ortel had filed for an IPO earmarking a funding requirement of Rs 850 million, including a capex plan of Rs 344.30 million on development of its analogue and digital services, Rs 289.04 million towards expansion of network for providing video, data and telephony services and Rs 217.40 million for developing its broadband services.

New Silk Route had expressed intent to fully exit from its investment in Ortel Communications through an offer for sale in the IPO. Sources say the private equity firm had put in Rs 840 million for Ortel?s stake.

Ortel, which offers cable TV, broadband and VoIP services, has a debt of around Rs 1.5 billion. Revenue in FY‘12 stands at Rs 1.25 billion, up 25 per cent over the earlier year, while Ebitda margin is close to 30 per cent. The company incurred a net loss of Rs 150 million in the fiscal.

Ortel requires funds for digitisation and expansion of the network. A dominant player in Orissa, the company is making efforts to penetrate into the neighbouring geographies of Chhatishgarh and parts of coastal Andhra Pradesh and West Bengal where its presence is still thin.

While other MSOs mainly provide their services through the local cable operator (LCO), Ortel follows the last mile ownership model. ?We are favourably positioned to implement digitisation because we have the last mile. We have already digitised 15 per cent of our network,? says Rath.

Latest Reads
Livestreaming App SWOO sees momentum in India; Launches Trivia Format in India

SWOO, a leading global livestreaming platform established in Middle East, today announced the launch of its SWOO TRIVIA SHOW ? a celebrity hosted live video streaming game show for Indians. SWOO is a user friendly, engaging and feature-rich live broadcasting app available across Android/ iOS/ Web...

Technology Software Applications
TiVo exits STB business

MUMBAI: TiVo is exiting the manufacturing, sales and distribution of set-top boxes to a yet-undisclosed third party, the company has said.

Technology Hardware Set-top Boxes
IET India IoT Panel joins hands with exhibitions india group for the 3rd edition of IoT india congress

IoT India Congress is India?s Platform of Platforms for the Internet of Things conceptualized by IET India IoT Panel, a think tank constituted by the Institution of Engineering and Technology (IET) India. The 3rd edition of IoT India Congress will be hosted in collaboration with India?s leading...

Technology Software Firmware
Tata Elxsi's Automation suite adopted by pan-European Media and Telecommunications Company

Tata Elxsi, a global design and technology services company, announced the licensing of its integrated test automation and monitoring suite ?FalconEye? to a pan-European media and telecommunications company for OTT automation and improving streaming performance.

Technology Software Firmware
Verimatrix recognized for contributions to latin american Pay-TV market with PRODU award win at NAB Show

LAS VEGAS: Verimatrix, a specialist in securing and enhancing revenue for network-connected devices and services, has received the PRODU Award for Best Pay-TV Technology Contribution on behalf of its MultiRights? OTT solution. MultiRights helps service providers effectively navigate the modern OTT...

Technology Software Firmware
Amagi debuts machine-learning powered content-preparation suite

Amagi, a cloud-based technology provider for media processing, has launched Tornado, a machine learning-based content preparation service that enables TV networks and content owners to scale their operations and accelerate broadcast workflows.

Technology Hardware Components
Sharp and TiVo extend interactive program guide deal to power content Discovery across entertainment devices

MUMBAI: TiVo Corporation (NASDAQ: TIVO), a global leader in entertainment technology and audience insights, today announced that Sharp Corporation will further utilize TiVo?s G-Guide HTML across Sharp 4K smart TVs and Ultra HD Blu-ray recorders in Japan, TiVo?s G-Guide xD app and remote schedule...

Technology Hardware Components
HARMAN announces Priyanka Chopra as global brand ambassador

HARMAN International, a wholly-owned subsidiary of Samsung Electronics Co., Ltd. focused on connected technologies for automotive, consumer and enterprise markets, today announced that actress, singer, producer and philanthropist Priyanka Chopra has been named a global brand ambassador for the...

Technology Hardware Components
Etere HSM expands interoperability with Grass Valley

Etere HSM features an integration with Grass Valley that improves interoperability, streamlines connectivity, enables faster content processing and includes deep archive capabilities. Etere introduces a new integration layer between Etere Hierarchical Storage Management (HSM) and Grass Valley...

Technology Hardware Components

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories