|
Hinduja TMT is to demerge its BPO arm, in a bid to better its market value. According to Ashok Hinduja, chairman, HTMT "The objective is to unlock value and make it easier for the investor and customer to understand the different business.
The Hinduja TMT (HTMT) board on Wednesday cleared the demerger of its BPO business, which will be spun off into a separate company and listed on the stock exchanges.
The listing of the BPO business will be effective from April 1, '06 and will depend upon clearances from the regulatory body and high court. It may take around four months, he added. Ashok Hinduja says, "We should be able to get a better value with this demerger. Currently, the market cap of the company is Rs 2,220 crore while the actual valuation is quite high."
The board also decided that the media and content subsidiary --- InNetwork Entertainment (INEL) --- will be reverse merged into HTMT. IndusInd Media and Communications (IMCL), the media subsidiary of the group, has cable and broadband under its umbrella.
It is India's leading multiple service operator (MSO) as well as a broadband operator, the company statement said. IMCL is a cable service provider with intra-city fibre networks and 6,000 km of trunk and access HFC networks, 80% of which is 2-way enabled.
The company has presence in 14 cities (9 of which are big cities) with around 40% market share in most of these markets. The current shareholders of HTMT will be allotted shares of the BPO company in proportion to the capital employed in the respective businesses, according to Mr Hinduja.
The shares in the BPO business will be decided on the shift of the assets and liabilities of the two business once they are demerged. The Hinduja group holds around 63% in HTMT. "The demerger will go a long way in speeding up inorganic growth opportunities both in technology and media/telecom companies, apart from aiding the induction of strategic and/or financial partners.
Operational efficiencies in both the resultant companies would also increase," Mr Hinduja added.
The media business too is well poised to take advantage of the emerging business opportunities in content and distribution that have recently opened up and is in negotiation with several leading players for collaboration and contracts in these spaces, the company statement said.
The company is also looking at getting a strategic investor or a private equity fund to divest their cable business. The BPO business has around 7,000 employees and should be valued at least at Rs 1,500 crore. "We are looking at growing the BPO business in an inorganic way through acquisitions," said Mr Hinduja.
|