Public sector telecom manufacturer, ITI Ltd is hopeful of completing its follow-on public offer (FPO) in the next two months for which it has already received Union Cabinet's approval in March this year.
The company will sell 180 million equity shares through this FPO, which will help it to meet the minimum public shareholding norm of 25 per cent as mandated by the market regulator, Securities and Exchange Board of India (SEBI). Notably, the deadline for achieving the minimum public float of 25 per cent will end in August this year.
"We have already received the Cabinet approval. We have also appointed merchant bankers and applied to Sebi. Hopefully, the FPO will be completed in next 2 months," Chairman and Managing Director of ITI Ltd, S Gopu told the Business Standard in a telephonic interaction here. He, however, declined to comment on the amount of capital to be raised through this process.
ITI Ltd, whose share price closed at Rs 95.40 at NSE at the end of Tuesday's trading session, is likely to raise up to Rs 17.25 billion from this FPO issue based on the CMP (current market price) of its shares.
"The funds raised will be utilized in supporting our new business initiatives and expansion plan," Gopu said.
After being sick for 16 years, ITI turned profitable by posting a net profit of Rs 1.02 billion and a revenue of Rs 17.03 billion for FY18. "We have taken a number of initiatives which has helped us in posting higher business growth. For example, we are expanding our data centre footprint and are also working on new technology areas such as the Internet of Things (IoT) and SmartCity project among others," the CMD of ITI Ltd said.
On Tuesday, ITI Ltd announced the expansion of its data centre facility by adding 1,000 additional racks in the existing data centre in Bengaluru apart from setting up of a new data centre of 200 racks capacity in its Naini (Allahabad, UP) plant.
"We have seen a lot of interest from public sector banks, private enterprises and global MNCs for our data centre services. With data localisation efforts, we see more demand in this space going ahead," Gopu said. The company, which has invested around Rs 2 billion in expanding data centre facilities, is hopeful of getting it back in 4 years.
The company, which draws a significant chunk of revenue from telecom equipment manufacturing business, has an order book of around Rs 20 billion as of now. "We are the lowest bidders for an order size of around Rs 80 billion coming from the army and other government agencies," he said.