Ortel To Come Up With An IPO Soon

Ortel Communications (Ortel) is coming up with an initial public offering (IPO) to BSE and NSE for its expansion plans. The offer includes both fresh issue and offer for sale (OFS) at a face value of Rs 10 each. The company and selling shareholder, NSR-PE Mauritius LLC are also looking for a private placement of 35 lakh equity shares of Rs 7500 lakh. The price band is not disclosed by the company in the DRHP. It is supposed to offer fresh issue worth Rs 10,000 lakh, and 40.91 lakh equity shares through OFS.

Ortel, a regional cable television (TV) service provider, has reserved 1 lakh equity shares for its eligible employees in this issue. At present, the company has 232.8 lakh outstanding equity shares. The lead managers for the IPO are IDFC Capital, Equirus Capital and Karvy.

The company distributes analog and digital cable TV service, high speed broadband service and VoIP services. It operates in four states – Andhra Pradesh, Chhattisgarh, Orissa and West Bengal. The company offers its services under various brand names like ‘Ortel Home cable’, ’Ortel Digital’ and ’Ortel Broadband’. Previously, it operated from 18 locations, and now operates from 39 locations, as on 30 September 2012.

Further, Ortel is planning to utilise the raised funds for its network distribution expansion and capital expenditure. The company wants to expand its network to distribute video, data and telephony services. It has plans to use the remaining amount for capital expenditure on the development of analog, digital and broadband services. Through this, Ortel intends to cover the untouched locations in the four states in which it operates.

On the financials’ front, till September 2012, Ortel has reported a topline of Rs 6,117 lakh. However the company reported a loss of Rs 1,287 lakh for the period ended September 2012. The company is making losses since the past four years on a YoY basis. However, it has not disclosed public issue related details in terms of the price band. We will keep you updated, once the company comes up with its price band, lot size and issue date of this IPO.