To file fresh DRHP next month
Ybrant Digital, a Hyderabad-based provider of digital marketing solutions, is in the process of raising Rs 700 crore through an initial public offering (IPO) to fund its overseas expansion plans.
“The company is currently writing a fresh draft red herring prospectus (DRHP) and has already roped in Deutsche Bank and BNP Paribas as lead bankers with Yes Bank and India Infoline Limited being the co-leads. It is planning to file the DRHP with the Securities and Exchange Board of India (Sebi) in mid-September 2010,” a company official told Business Standard on condition of anonymity.
Ybrant is looking at utilising the IPO proceeds to expand into Chinese and Brazilian markets, besides opening 100 sales offices across the globe, the official added. The company, at present, has sales teams in 20 countries selling media that comes from third-party publishers across 140 countries. The company had filed its DRHP with Sebi in September 2007. However, the IPO plans were put on hold as the markets were not so lucrative then.
Ybrant Digital chairman and managing director Suresh Reddy declined to comment on the IPO plans. “At this point, we are looking at acquiring two companies – one in the advergaming (or in-game advertising) space and the other a US-centric affiliate network – for $20 million (about Rs 94 crore) and $12 million (Rs 56.4 crore) respectively. Both the transactions are running parallel and we are hopeful of closing these deals in a couple of quarters or earlier,” he said.
While the advergaming company, which also develops games for PlayStation and other standard gaming consoles besides doing games for iPhone and mobile platforms like Symbian, will feed Ybrant’s need for new-age content and for mobile advertising, the company is planning to leverage the affiliate network acquisition to start educating various other markets about affiliate marketing, Reddy said.
“We intend to create a hub for bringing all kinds of gamers across the world into one small location through the advergaming buyout and then run advertisements on it,” he added.
The company will fund these two acquisitions through a pre-IPO round, and negotiations with its existing investors, including GE Capital Asia-Pacific, are in advanced stages to raise $35 million (Rs 165 crore). So far, Ybrant has raised over $55 million (Rs 259 crore) from private equity players like New York-based Sansar Capital and GE Capital Asia-Pacific, and four hedge funds.