Onmobile plans Rs 600 cr IPO

The Bangalore-based value-added services (VAS) provider OnMobile is planning to tap the capital market with an initial public offering (IPO) of Rs 500-600 crore.

The company's maiden offer is expected to open during the current financial year and it intends to invest the proceeds for its foray into the Wireless Application Protocol (WAP) and General Packet Radio Service (GPRS) segments.

The company is gearing up to become an end-to-end VAS solution provider, according to sources close to the development.

A company official said: "As of now, we have no comments to offer", but added that like every other company, OnMobile was also looking at various modes of growth.

If OnMobile succeeds in raises around Rs 500 crore, it will be the one of the largest IPOs in the VAS sector. The company, headed by its founder and CEO Arvind Rao, is believed to be posting annual revenues of around $50 million (around Rs 210 crore).

According to industry analysts, the company has an estimated value of around $300 million (around Rs 1,250 crore).

According to an analyst, a Rs 500-crore IPO could be a bit too high for any other VAS player, but for OnMobile "it would not be difficult due to stakes held by high-profile companies".

The company was incubated by Infosys Technologies in 2000, and at present the IT major holds a 14 per cent stake in it.

Global investment banking majors Deutsche Bank and Goldman Sachs, the UK-based private investment firm Polygon Investment Partners and venture capital firm Argo Global Capital are the other investors in the company. However, the percentage of stakeholding could not be ascertained.

OnMobile provides a host of value-added services, mobile content distribution, interactive media portals, 1-to-1 direct marketing via mobiles, and m-commerce in the fast-growing Indian telecom market with 150 million plus subscribers. The company's competitors include IMI Mobile, Cellebrum and Mauj, among others.

Earlier, the company had secured a strategic financing of $27.8 million (around Rs 115 crore) from Deutsche Bank, Goldman Sachs and Polygon Investment Partners.

This was the second round of funding for the company following its $18 million (around Rs 73 crore) first round in 2000 secured from Argo Global and HNQ Asia-Pacific.