PEs Look To Exit ACT As WFH Boosts Valuations

CIOReviewIndia Team | Tuesday, 25 August 2020, 04:53 IST

PEs Look To Exit ACT As WFH Boosts Valuations

In talks to sell a controlling stake in India’s largest non-telco internet service provider, the owners of Atria Convergence Technologies (ACT) said, despite witnessing a surge in demand for home internet services.

Holding 90+ percentage shares in the company, private equity firms True North and TA Associates are looking to reach an enterprise value of almost $1.4 billion. ACT raised $500 million from True North and TA Associates in 2015.

Their plan revolves around delivering a profitable exit to the two private investors by capitalizing on the internet boom that increased due to the work-from-home economy.

A concerned person about this stake selling, said, “The discussions are at an early stage. They are in the process of appointing an investment bank to manage the sale and are in talks with a few foreign investment banks for this. They will be looking at telcos that want to add to their wired broadband services and foreign PE funds for the stake sale.”

As per the global investors record, the interest in India’s fast-growing internet services business is rising, with customers consuming heavy data at home while working remotely. Consumer-end has switched their basic cable TV services and started to avail internet-based services like Netflix, Amazon Prime Video and Disney Hotstar. This is adding to the development of increasing horizon of broadband internet.

In the previous month, Qatar Investment Authority had advanced talks with Reliance Industries Ltd for an investment of around $1.5 billion for infrastructure of Reliance Jio Infocomm Ltd’s fibre-optic assets.

“This is the right opportunity to provide an exit to the private equity players that backed ACT Fibernet for long," said the concerned person.

Though emails sent to ACT Fibernet True North and TA Associates is unanswered.

Not withholding to Jio’s threat, ACT Fibernet has gained the position of the fastest growing wired broadband company as per the Telecom Regulatory Authority of India data.

Adding 70,000 subscribers in the period of four months, ACT Fibernet reached 1.59 million subscribers. Jio with 860,000 fiber broadband customers during the end of December reached 900,000 subscribers by April-end and Bharti Airtel witnessed wired broadband subscriber base increase from 2.42 million to 2.44 million. Reliance Jio owned Hathway reached 970,000 subscribers from 900,000.

However, BSNL is the leader in wired broadband services in India with 7.97 million subscribers (in terms of users).

Unique from its competitors, ACT Fibernet is purely wired broadband services company having presence in 18 cities.

Jio’s pan-India presence is substantial and it is planning to offer fiber broadband services in around 1500 cities in the coming 12-18 months.

Considering to raise nearly Rs.800 crore in the initial public offering a year or two ago, ACT Fibernet dismissed the plan due to poor IPO market conditions and Jio’s wired broadband services launching.

“ACT Fibernet may be able to get a decent valuation, especially because the demand for fast-speed internet for gaming, work and entertainment has increased radically," stated the concerned person.In talks to sell a controlling stake in India’s largest non-telco internet service provider, the owners of Atria Convergence Technologies (ACT) said, despite witnessing a surge in demand for home internet services.

Holding 90+ percentage shares in the company, private equity firms True North and TA Associates are looking to reach an enterprise value of almost $1.4 billion. ACT raised $500 million from True North and TA Associates in 2015.

Their plan revolves around delivering a profitable exit to the two private investors by capitalizing on the internet boom that increased due to the work-from-home economy.

A concerned person about this stake selling, said, “The discussions are at an early stage. They are in the process of appointing an investment bank to manage the sale and are in talks with a few foreign investment banks for this. They will be looking at telcos that want to add to their wired broadband services and foreign PE funds for the stake sale.”

As per the global investors record, the interest in India’s fast-growing internet services business is rising, with customers consuming heavy data at home while working remotely. Consumer-end has switched their basic cable TV services and started to avail internet-based services like Netflix, Amazon Prime Video and Disney Hotstar. This is adding to the development of increasing horizon of broadband internet.

In the previous month, Qatar Investment Authority had advanced talks with Reliance Industries Ltd for an investment of around $1.5 billion for infrastructure of Reliance Jio Infocomm Ltd’s fibre-optic assets.

“This is the right opportunity to provide an exit to the private equity players that backed ACT Fibernet for long," said the concerned person.

Though emails sent to ACT Fibernet True North and TA Associates is unanswered.

Not withholding to Jio’s threat, ACT Fibernet has gained the position of the fastest growing wired broadband company as per the Telecom Regulatory Authority of India data.

Adding 70,000 subscribers in the period of four months, ACT Fibernet reached 1.59 million subscribers. Jio with 860,000 fiber broadband customers during the end of December reached 900,000 subscribers by April-end and Bharti Airtel witnessed wired broadband subscriber base increase from 2.42 million to 2.44 million. Reliance Jio owned Hathway reached 970,000 subscribers from 900,000.

However, BSNL is the leader in wired broadband services in India with 7.97 million subscribers (in terms of users).

Unique from its competitors, ACT Fibernet is purely wired broadband services company having presence in 18 cities.

Jio’s pan-India presence is substantial and it is planning to offer fiber broadband services in around 1500 cities in the coming 12-18 months.

Considering to raise nearly Rs.800 crore in the initial public offering a year or two ago, ACT Fibernet dismissed the plan due to poor IPO market conditions and Jio’s wired broadband services launching.

“ACT Fibernet may be able to get a decent valuation, especially because the demand for fast-speed internet for gaming, work and entertainment has increased radically," stated the concerned person.

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