Viom Networks defers IPO plan to next year over sluggish market

Citing market conditions are sluggish, Viom Networks has delayed its Initial Public Offering (IPO) from December this year to March-April 2016.

The board of Telecom tower operator Viom Networks will meet in August and take a final call on the IPO.

Sunil Kanoria, director at Viom, told Economic Times, “Even if the board decides on an IPO, it is unlikely before March 2016 as market conditions are not favourable now."

Industry officials told the financial daily that Viom was mulling an IPO by December this year in a bid to fund growth plans. Viom’s talks to sell controlling stake to American Tower Corp (ATC) had failed due to valuations.

Now, the telecom tower operator was looking to raise a shade over Rs 1,000 crore to fund tower site expansion amid surging carrier demand for data sites and open an exit route for stakeholders keen to cash out.

ET reported that Tata Teleservices has 54% in Viom while Kolkata-based Srei holds 18.5%. The remaining ones are owned by few private equity firms.

Sources told ET that Viom was even pushing for an enterprise value of nearly 12 times its EBITDA, or earnings before interest, taxes, depreciation & amortisation, a key profitability indicator.

A company executive told ET, “Viom is in no tearing hurry to do the IPO because its internal accruals are strong and its EBITDA is at Rs 2,000 crore annually. But the company needs to expand its tower capacity to meet expected boom in demand.”

Meanwhile, Viom is expecting an additional demand of nearly two lakh data sites over next 18 months as mobile carriers are splurging on 3G networks and Mukesh Ambani's Reliance Jio Infocomm is due to launch 4G services by December.

Stock market is not buoyant. On Wednesday, market bellwether Bombay Stock Exchange Sensex closed 484 points, or 1.72%, down from its previous close in response to massive plunge in Chinese stock markets.