Net4India to dilute up to 15% equity

Net4India Ltd, a BSE-listed provider of network and application services and solutions, is planning to dilute 10-15 per cent promoter equity in the company to raise about Rs 20 crore as part of expansion capital.

“The company has had a successful run in its primary business of providing enterprise Internet access among small and medium businesses. The equity raise will be via block deals and is aimed at part-financing their datacenter expansion requirements,” said a source close to the development.

Net4India officials did not return several calls seeking comment on their expansion plans.

The Delhi-based ISP, at present, has about 18,000 sq feet of datacenter space under management with plans to add 15,000 sft to its datacenter operations in Chennai shortly.

The company is looking at an estimated capex of Rs 60 crore over a 3-year period. “Net4India is keen to reduce its undue dependence on Web services, which currently bring in 41 per cent of the company’s revenues,” sources close to the development confirmed. Having obtained an LoI (Letter of Intent) from the Centre recently for national and international long distance licenses, Net4India is understood to be keen to widen its data and voice services offerings.

The company is also understood to be targeting the $1.4-billion market for IPLC (International Private Leased Circuit) and MPLS (Multiprotocol Label Switching) services in India. It is said to be keen to provide IPLC and MPLS-based Virtual Private Network (VPN) services to its existing client base of midsize and large clients.

By providing a wider range of data and voice services, Net4India is looking at increasing its revenue share of VoIP (Voice-over-Internet-Protocol) services, which presently fetch 11 per cent of revenues. “This will also enable them to enrich their enterprise access offerings, which is a key vertical which can leverage the upside in VoIP offerings,” sources said.