Himachal Futuristic Communications (HFCL) plans to raise at least Rs 700-800 crore during the current fiscal. Of this Rs 200-300 crore will be deployed in its subsidiary HFCL Infotel to complete the ongoing project in Punjab.
C K Goushal, advisor, finance, HFCL, said: "We need around Rs 200 to 300 crore to complete the project in Punjab. The Rs 1000-crore project kicked off in 2000 and we have completed 70-80 per cent of the work."
The company is looking at various ways to raise the money including divesting its stake in Infotel in favour of a strategic investor or a private equity fund. HFCL has a 74 per cent stake in Infotel while the rest is in the hands of financial institutions.
There have been rumours in the market that Himachal is looking at exiting from HFCL Infotel totally in the current financial year. The divestment is expected to fetch over Rs 700 crore. Goushal said the immediate priority was to complete the project (in Punjab) before HFCL took a decision to exit from the company altogether.
How much will actually be divested in the initial instance is also to be decided. In order to sell its stake in its subsidiary, HFCL will soon initiate talks with leading advisors.
HFCL had put in Rs 427 crore worth of equity investment in HFCL Infotel. The latter is the only private basic telephone services provider in the Punjab circle. It has acquired over 75,000 customers in less than two years and the list is growing by 7000-8000 per month.
HFCL Infotel also has one of the highest billings per line in the country, after Hughes Telecom in Mumbai. "Given the fact that the Punjab circle offers opportunity for growth due to its prosperity, compact geography and limited investments required, we see HFCL getting a good value for its investment in the company (Infotel)," Goushal said pointing out that the company management has indicated an amount of over Rs 700 crore for it as a preliminary valuation.
According to analysts, HFCL -- which had tried diversifications into the entertainment business in the recent past -- is now planning to concentrate on its core business of providing telecom equipment and offering turnkey solutions for the telecom sector.
As part of this exercise, it is also planning to exit from its investment in AB Corp which is expected to fetch it over Rs 400 crore.
