Srei, Tatas target September listing for Viom Networks

Cellphone tower company will look to raise Rs 2,000 crore

Srei Infrastructure Finance and Tata Teleservices are targeting to list their telecom tower company Viom Networks by September.

The listing could be in India or abroad depending on response from investors, said chairman and managing director of Srei Infrastructure Hemant Kanoria.

Viom Networks will look to raise Rs 2,000 crore and has hired Credit Suisse and Citigroup to raise funds. Bankers said taking into account the valuation of other tower companies like Bharti Infratel, Viom Networks was expecting a valuation of $4 billion (Rs 24,000 crore).

Viom Networks can turn out a bonanza for Tata Teleservices, writing its accounts with red ink. Tata Teleservices suffered another year of loss but Viom Networks made profits for the second year.

TOWER POWER

• Rs 24,000 cr: Valuation Viom Networks is expecting
• 40,000: Towers it has in India
• Rs 120 cr: Net profit in 2013-14
• Rs 80 cr: Net profit in 2012-13
• The Tatas own close to 54% in Viom Networks, Srei owns 16%
• The stock has been up 100% since January this year

Viom Networks has 40,000 cellphone towers in India and earned a net profit of Rs 120 crore in 2013-14, up from Rs 80 crore profit in 2012-13.

Bharti Infratel, with 83,368 towers, has a market value of Rs 49,000 crore and made a profit of Rs 1,089 crore on revenue of Rs 5,000 crore in 2013-14.

The listing of Viom Networks is important for the Tatas because they have to buy back Japanese telecom company NTT Docomo's 26.5 per cent stake in Tata Teleservices for Rs 7,200 crore. This transaction is expected soon as NTT Docomo has an end-June deadline to exit India.

The Tatas own close to 54 per cent in Viom Networks and Srei 16 per cent. Private equity companies Macquarie SBI Infrastructure Fund, GIC Investments, IDFC Private Equity and Funderburk Mauritius hold 30 per cent and are planning to exit Viom Networks with the listing. Tata Teleservices will also sell a part of its stake but will remain invested as towers are critical to its business.

The Srei Infrastructure stock closed 1.4 per cent lower at Rs 48 on Friday on BSE. The stock is up 100 per cent since January on reports of Viom Networks listing as investors are expecting Srei Infrastructure to unlock the value of the tower company.