Indian Telephone Industries plans to raise Rs 1,600-crore through FPO

State-owned Indian Telephone Industries (ITI) will have a  Rs 1,600-crore follow-on public offer (FPO) on Friday. The FPO comprises fresh issue of up to 180 million equity shares. An additional issue constituting up to 1.8 million shares will be reserved for employees.
 
The issue will open on Friday, January 24 and close on Tuesday, January 28, the company said in a statement on Monday. The last FPO to hit the market was in 2014 by state-owned Engineers India. Market players said FPO as a fund raising instrument has lost its appeal, as companies these days opt for newer methods like offer for sale (OFS) or institutional placement programme (IPP).

 
The price band for the FPO will be announced on Wednesday. Proceeds of the issue will be utilised towards working capital requirements, repayment of loan taken by the company, and for general corporate purpose. On Monday, shares of ITI ended at Rs 103, down 0.3 per cent. The company has a market cap of Rs 9,226 crore. The public issue is being managed by BOB Capital Markets, Karvy Investor Services and PNB Investment Services. The FPO will help the company meet Sebi’s requirement of minimum 25 per cent public shareholding. The government holding in the company is currently at 90 per cent.

 

ITI is into manufacturing of a diverse range of Information and Communication Technology (ICT) products and solutions. Its customers include BSNL, MTNL, defence, paramilitary forces and state governments.
 
The company has a strong order book of Rs 11,051.12 crore as on December 2019, which includes various government projects such as ASCON, BharatNet, Network for Spectrum, smart energy meters, space programs and e-governance projects. ITI said it is looking to leverage their relationship with the Centre and various public sector units, modernise its infrastructure and technology, as well as team up with innovative technology leaders and start-ups.