ITI is looking to raise about ₹1,600-1,800 crore through a follow-on public offer (FPO), with a mid-March timeline. The state-owned telecom equipment manufacturer is looking to sell fresh equity of about 18 crore shares during the issue.
The FPO will help the Bengaluru-headquartered PSU to comply with the SEBI regulations of meeting the minimum 25 per cent public shareholding norm. At present, about 10 per cent is held by public and the company will sell the remaining 15 per cent through the offer, sources close to the development told BusinessLine.
While the regulator approved the company’s draft red herring prospectus (DRHP) last month, the timeline and the amount to be raised were yet to be finalised.
When contacted ITI Chairman and Managing Director K Alagesan said: “We will finalise the date soon, and closer to the date we will finalise the amount. We are yet to take a call.”
According to sources, the company now has to file the red herring prospectus (RHP), while it is also planning offshore roadshows, in addition to domestic ones, mainly in the US, Singapore, Europe and Hong Kong.
The PSU will use the proceeds for funding working capital requirements and repayment of loans. BOB Capital Markets, Karvy Investor Services and PNB Investment Services are the bankers to the issue. ITI has its manufacturing facilities in Bengaluru, Mankapur, Naini, Palakkad and Rae Bareli, and employs more than 3,500 personnel. The company makes electronic products and components ranging from radio modems, to Defence security, network products, printed circuit board manufacturing, and Wi-Fi hotspot modems, among others. It is also into contract manufacturing and 3D printing.
Revival plan
In 2014, the Cabinet Committee on Economic Affairs approved a revival plan for ITI, earlier known as Indian Telephone Industries, with a fund infusion of ₹4,156.79 crore. The plan was based on the recommendations of the Board for Reconstruction of Public Sector Enterprises. ITI was set up in 1948 and incorporated in 1950 under the then Mysore Companies Act, 1938, and later converted as the first PSU of the country. The Government of India holds 90 per cent stake in the company. ITI had started making profits since last year.