Mbt Plans Floats To Fund Buyouts

Talking to Business Standard from Pune, Kiran Deshpande, managing director, Mahindra British Telecom Ltd, said, "our investments will be in companies which are value augmenting in nature to the current line of business."

According to Deshpande, systems consulting companies in areas like telecommunication, Internet solutions company or a software services firm with offshore development facilities in Europe and the US will typically fit the acquisition bill.

Deshpande said that the company was also considering venture capital funding for companies in areas which are complementary to its own lines of businesses. He, however, refused to give any details about the quantum of funds to be raised through the two issues.

MBT's Indian issue is likely to open in November 2000, he said. "The size of the issue will depend on the primary and secondary split in the public offering," Deshpande said.

Post-issue, while the public will hold 10 per cent of the paid-up capital, 5 per cent would be earmarked for employee stock option plans (ESOPs) and the balance 85 per cent will be held between Mahindra & Mahindra and British Telecom, the two joint venture partners.

Earlier in London, Mervyn Burgoyne, business development head, non-British Telecom business, told Business Standard that MBT's blueprint included a Nasdaq listing soon after the Indian offering.

Confirming the Nasdaq issue plans, Deshpande said, "the domestic issue is meant to establish a baseline and benchmark MBT's stock in India." He added that the current focus was listing in the Indian bourses.

The BT business even today accounts for almost 75 per cent of MBT's total revenues of Rs 256 crore. According to analysts such over-dependence on one client was not advisable over a long period of time.

According to Deshpande, the BT share of the business was decreasing at the rate of 6-8 per cent per annum over the last couple of years. "Our objective is to create a balanced portfolio," he said.