Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / OnMobile Global drops plan for a large overseas acquisition
BackBack

OnMobile Global drops plan for a large overseas acquisition

OnMobile Global drops plan for a large overseas acquisition

Premium

Mumbai: India’s largest telecom value-added service firm OnMobile Global Ltd has shelved near-term plans for a large acquisition, Mumbai-based brokerage India Infoline Ltd said on Monday.

OnMobile’s board of directors had on 29 January passed an enabling resolution to raise up to Rs1,000 crore.

“OnMobile had announced plans last month to raise Rs10 billion (Rs1,000 crore) to complete a large overseas acquisition. This could have led to potential 15% (equity) dilution," said G.V. Giri and Mudit Bali, analysts with India Infoline, in a 26 March report. “The company has since dropped the acquisition plan, based on results of its due diligence of the target company."

OnMobile’s chief financial officer Rajesh Moorti declined to comment, citing the silent period ahead of announcing its quarterly financial results in April.

The Bangalore-based firm, which had Rs406 crore in revenue for the fiscal ended March 2009, is a spin-off from India’s second largest information technology services exporter Infosys Technologies Ltd. Established in 2000, the firm has so far made four acquisitions for a total of around Rs269 crore.

Apart from most of the large wireless service providers in India, OnMobile counts Spanish telco Telefonica SA, the third largest telecom firm in the world, among its clients.

Another market analyst told Mint that some investors had raised concerns about the acquisition plans.

“At the time of passing the enabling resolution (by the board), a few institutional investors had expressed their displeasure at the management’s idea of wanting to grow through inorganic means," the analyst with an independent equities research firm told Mint. He did not want to be identified as he is not the authorized spokesperson for the firm. “The firm had already made four acquisitions in the past. Moreover, it is in a space that has ample opportunities for organic growth."

Shares of OnMobile on Tuesday fell by 0.89% to close at Rs383.90 on the Bombay Stock Exchange, while the benchmark Sensex index declined 0.68% to close at 17,590.17 points.

lison.j@livemint.com

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 30 Mar 2010, 10:45 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App