Ortel Communications Limited (the “Company” or the “Issuer”) proposes to open
on March 3, 2015, a public issue of up to 12 million equity shares of face value of Rs. 10 each (“Equity Shares”) including a share premium per Equity Share (the “Issue”). The Price Band is fixed from Rs. 181 to Rs. 200 per Equity Share. The Issue comprises a fresh issue to the public
of up to 6 million Equity Shares (the “Fresh Issue”) and an Offer for Sale of up to 6 million Equity Shares (“Offer For Sale”) by NSR-PE Mauritius LLC (the “Selling Shareholder”). The Bid/ Issue closes on March 5, 2015. The minimum Bid lot is 75 Equity Shares and in multiples of 75 Equity Shares thereafter. The Issue constitutes 39.25% of the fully diluted Post-Issue Paid up Equity Share Capital of the Company.
The Company and the Selling Shareholder may, in consultation with the Book Running Lead Manager, allocate up to 60% of the QIB Portion to Anchor Investors at the Anchor Investor Allocation Price, on a discretionary basis, out of which at least one-third will be available for allocation to domestic Mutual Funds only. Anchor investors shall bid on Anchor Investor Bidding Date (March 2, 2015).
The Equity Shares offered
through the Red Herring Prospectus are proposed to be listed on the NSE and the BSE.
The Book Running Lead Manager (“BRLM” *) to the Issue is Kotak Mahindra Capital Company Limited.
The Issue is being made through the Book Building Process in compliance with the provisions of Regulation 26(2) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended, (the “SEBI Regulations”), wherein at least 75% of the Issue shall be allotted on a proportionate basis to Qualified Institutional Buyers (“QIBs”). In the event of under-subscription or non-allocation in the Anchor Investor Portion, the balance Equity Shares shall be added to the Net QIB Portion. Such number of Equity Shares representing 5% of the Net QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only.
The remainder of the Net QIB Portion shall be available for allocation on a proportionate basis to QIBs (including Mutual Funds). However, if the aggregate demand from Mutual Funds is less than 180,000 Equity Shares, that is 5% of the Net QIB Portion, the balance Equity Shares available for allocation in the Mutual Fund Portion will be added to the Net QIB Portion and allocated proportionately to QIBs in proportion to their Bids. If at least 75% of the Issue cannot be allotted to QIBs, all the application monies will be refunded forthwith. Further, not more than 15% of the Issue shall be available for allocation on a proportionate basis to Non Institutional Bidders and not more than 10% of the Issue shall be available for allocation to Retail Individual Bidders, subject to valid Bids being received from them at or above the Issue Price. All Investors, other than an Anchor Investor, may participate in this Issue through the Application Supported by Blocked Amount (“ASBA”) process by providing the details of their respective bank accounts in which the corresponding Bid Amounts will be blocked by the SCSBs.
The Company is a regional cable television and high speed broadband services provider focused in the Indian states of Odisha, Chhattisgarh, West Bengal and Andhra Pradesh. It was one of the first private sector companies in India to be granted an ISP license by the Government of India. It has built a two-way communication network for ‘Triple Play’ services (video, data and voice capabilities) with control over the ‘last mile’. It pioneered the primary point cable business model in India by offering digital and analog cable television, broadband and VAS services in Orissa, Chhattisgarh, West Bengal and Andhra Pradesh.
It currently holds a dominant position in Orissa, with a fast-emerging presence in three other markets, covering an addressable market of approximately five million homes (Source: MPA Report, 2014). It currently offers services in 48 towns and certain adjacent semi urban and rural areas with over 21,600 kilometers of cables supported by 34 analog head-ends and five digital head-ends. The brand names, “Ortel Home Cable”, “Ortel Digital” and “Ortel Broadband” are well known in the regions in which it operates. It commenced its business in 1995 and currently, business is broadly divided into (i) cable television services comprising of (a) analog cable television services; (b) digital cable television services including other value added services such as HD services, NVoD, gaming and local content; (ii) broadband services; (iii) leasing of fibre infrastructure; and (iv) signal uplinking services. The Company’s business model is focused on the control over the ‘last mile’ connection. As on December 31, 2014, 87.21% of cable subscriber base is on its own ‘last mile’ network. It services both retail and corporate customers. It has grown both organically and inorganically through sale of services directly to the cable television subscribers and through buyout of network equipments, infrastructure and subscribers of other MSOs and LCOs.