HFCL Infotech, a subsidiary of Himachal Futuristic Communications (HFCL), plans to raise Rs 100 crore by privately placing 4-5 per cent equity with foreign and domestic investors. The proceeds of the placement will be used by the company to finance its expansion plans.
C K Goushal, financial advisor at HFCL, confirmed this development and said the talks are at an initial stage. The company plans to raise around Rs 100 crore through the placement. Currently, HFCL Infotech has equity base of Rs 430 crore.
HFCL Infotech is a basic service provider in Punjab. It has also entered broadband and multimedia services using optic fibre backbone and broadband access network in Punjab and Chandigarh. It had recently launched its basic telephony service using optical fibre technology.
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HFCL Infotech was earlier known as Essar Commvision. HFCL, currently holds around 90 per cent in the company and has already invested around Rs 430 crore in the subsidiary.
The company plans to offer efficient access of voice and data service, Internet-calling cards, video conferencing, cable television and ISDN services/leased lines. It also plans to offer value-added services like Intelligent Network, which will provide services like Virtual Private Network, toll-free lines, calling cards, information services like sports, stock, elections etc.
The company has already started its services in Chandigardh and is expected to commence its services in other cities such as Ludhiana, Jalandar and Amritsar in the next 2-3 months. The company hopes to achieve a net profit from 2006 wherein the subscriber base would be around 2,90,000. The profits thereafter are expected to increase many folds along with the subscriber base.
Adds Goushal, "We will enter market with an IPO only in the next 18-24 months, that is, when we complete our network of 500,000 lines in all the cities in the state and reach a subscriber base of 150,000." "This move is being done in order to attract better valuations," he added.