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OnMobile Global, India’s largest mobile Value Added Services (VAS) company, is looking to raise Rs. 350-450 crores from its Initial Public Offering, with shares priced between Rs. 425 and Rs. 450 for shares of face value Rs. 10 each. The issue will be open for subscription between January 24th and 29th 2008. The issue would constitute 18.99 percent of the post-Issue paid-up capital of the company, once listed on the BSE and NSE; it includes a fresh issue of 8,613,356 shares, and the sale of 2,287,189 shares from Onmobile Systems Inc.
OnMobile was incubated at Infosys, and the company has opposed the IPO; OnMobile CEO Arvind Rao tells CNBC-TV18 that promoters will hold a significant part of the company, though he doesn’t confirm whether Infosys is selling its stake or not. The company will use the money to make infrastructure investments in its offices at Bangalore, Mumbai and Delhi, set up R&D centres, repay loans and expand their team. The proceeds will also be used for expanding international operations — offices in London and the US — and acquisitions with the primary goal of acquiring products. Last year, OnMobile had acquired VoxMobili, reportedly for $35.12 Million.
The companys Profit after tax was Rs. 337.2 million in 2006-07, up from Rs. 140.2 million in 2005 at a CAGR of 55.1 percent. 90 percent of 2006-07 revenue was from revenue sharing agreements with carriers. 81 percent of revenue is from its top five customers, Over 40 percent from music, mostly Caller Ring Back Tones.
The Issue has been graded above average by CRISIL and has been assigned a grade of 4/5 (download the report here). 30 percent of the issue will be allocated to Retail investors, while 60 percent will be offered to Qualified Institutional Buyers (QIBs) (5 percent to Mutual Funds) and not less than 10 percent to Non-Institutional bidders.