Hughes Tele sets Rs 12 floor price for IPO

Hughes Tele sets Rs 12 floor price for IPO
ENS ECONOMIC BUREAU

MUMBAI, AUG 28: Hughes Tele.com India Ltd (HTIL), the basic telecom services provider in the Maharashtra Telecom Circle, is entering the capital market with an initial public offering (IPO) to raise Rs 749.21 crore. The 90 per cent of the issue is being offered through the book building route with a floor price of Rs 12 per share, while the remaining 10 per cent will be through `fixed price' offer, the pricing of which will be discovered after the bookbuilding offer.

The company at present owns 27,000 lines spread over Mumbai, Navi Mumbai and Pune primarily in the business, multi-line residential and public call office sectors. It is currently engaged in installing multiple fibre grids in Mumbai and Pune. It is also investing in state-of-the-art fibre optic cable network capable of supporting high-bandwidth applications for its predominantly business customers.

"Using a fibre to the business strategy, the company intends to roll out high-quality optic fibre right into the customers' premises. The broadband data-centric architecture will provide a variety of service like high speed internet access, virtual private networks, security services, etc." HTIL CEO Prakash Bajpai said.

The construction period of the project planned through March 2004, during which time the project cost, net of internal generation, is estimated at Rs 3,485 crore, Bajpai said. The company intends to finance the project through existing promoters equity contribution of Rs 667 crore, additional equity of about Rs 886 crore, which it expects through the IPO (including Rs 137 crore as promoters contribution to the issue), project financing of Rs 854 which has been underwritten by ICICI and Rs 1,078 crore of vendor financing and Rs 389 crore expected from internally generated cash flows.

He said Hughes Electronics Corporation, one of the promoters (the other two being Alltell Corporation of US and the Ispat group), had brought in additional capital of Rs 137 crore as promoter's contribution.

For the year ended March 31, 2000 the company has incurred a net loss of Rs 270.14 crore, even as the call revenue increased to Rs 63.81.