The Hindu Business Line : Data Access gets SEBI nod for Rs 120-cr IPO

INTERNATIONAL long distance operator Data Access (India) Ltd has received the mandatory clearance from SEBI for its forthcoming initial public offering (IPO) of equity shares to be sold through the book-building route

According to Mr Siddhartha Ray, Chairman and Managing Director, Data Access, the company has also received basic clearance from the stock exchanges and is likely to go public in the next couple of weeks, with a view to mop up around Rs 120 crore from the market.

The company plans to issue 50 million equity shares at a premium and hopes to utilise the net proceeds of the IPO for expanding and upgrading its international long distance telephony network, meeting long-term working capital needs and repaying external commercial borrowings, he told Business Line.

Mr Ray noted that despite the current bearish phase of the stock market he remained optimistic about the outcome of the IPO, mainly due to the fact that Data Access would be the third private sector telecom operator to be listed on the stock exchange after Videsh Sanchar Nigam Ltd (VSNL) and Bhart Tele-Ventures Ltd.

"Our revenues are predominantly dependent on ILD business and our revenue streams are not diversified into multiple revenue streams such as basic, cellular or national long distance. Our network has been designed to cater to traffic demand outside the country and our business model supports it. For that matter we already have a market share of close to 40 per cent in the ILD sector," he said.

"For the proposed expansion plans we do not have any substantial capital requirement beyond what is being raised through the IPO. We intend to fund our expansion through a combination of internal accruals and proceeds of this issue. We believe that we have sufficient arrangements to meet 75 per cent of our estimated fund requirement after excluding the amount raised through the fresh issue of share," he noted.

The authorised share capital of the company is Rs 145.73 crore. A majority stake is held by Pacific Netinvest Ltd (49.73 per cent) and SPA Enterprises (24.38 per cent), while the remaining 23.40 per cent is held by a subsidiary of PCCW Hong Kong and employees (1.95 per cent).

The company proposes to offer fresh shares for the issue, whereby the holding of Pacific Netinvest will come down to 37.26 per cent, SPA Enterprises to 18.27 per cent and PCCW to 17.54 per cent. The public on the other hand will hold 25.07 per cent of the equity shares in the company.

Going by SEBI guidelines, up to 50 per cent of the fresh shares will be allocated to qualified institutional buyers on a discretionary basis, not less than 25 per cent to non-institutional investors and not less than 25 per cent to retail investors on a proportionate basis. SSKI Corporate Finance and Enam Consultants are the joint book running lead managers, while Karvy Consultants is the registrar to the issue.

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