Mumbai: IDFC Alternatives, the private equity (PE) arm of IDFC group, has bought a 33% stake in New Silk Route (NSR)-backed telecom tower company Ascend Telecom Infrastructure Pvt. Ltd, two people involved in the transaction said.
IDFC Alternatives bought Ascend Telecom’s shares worth Rs365 crore and convertible debentures worth Rs220 crore, the persons said on condition of anonymity. As part of the deal, IDFC Bank will also refinance Ascend Telecom’s loans of Rs620 crore. The development was first reported by news portal VCCircle last week.
Ascend, earlier known as Aster Infrastructure Pvt. Ltd, was established in 2002 as an independent passive telecom infrastructure company, and was renamed in 2010.
It received its first round of private equity investment from NSR in 2007. In 2010, NSR bought out the promoters’ stake in the company and took over control.
In 2011, Ascend Telecom acquired India Telecom Infra Ltd (ITIL), a tower infrastructure company jointly promoted by TVS Interconnect Systems and Infrastructure Leasing and Financing Services (ILFS), adding 2,500 towers and 4,000 tenants to the existing 1,200 towers and 1,600 tenants.
Currently, Ascend has nearly 5,222 telecom towers and is present in all 22 telecom circles.
The company has signed long-term master service agreements for tower leasing with several leading telecom operators including BSNL, Idea, Vodafone, Tata Teleservices and Bharti Airtel Ltd.
For IDFC Alternatives, this is the second transaction in telecom infrastructure. Last year, it had sold some of its stake in telecom tower operator Viom Networks Ltd.
NSR, IDFC Alternatives and IL&FS did not respond to requests over the weekend for a comment.
The persons quoted above said IDFC Alternatives could further hike its stake in Ascend once NSR begins diluting its stake.
“NSR is also looking to exit the company and has been in talks with potential buyers,” the persons added.
“We have several options for exit available and there is significant buyer interest in the company,” a senior NSR official told Mint on condition of anonymity.
The transaction comes at a time of growing consolidation in India’s telecom infrastructure space. Several large telecom companies are looking to monetise tower assets in the wake of shrinking revenue margins in the intensely competitive mobile telephony market.
In March, global private equity giant KKR and Canadian state-owned pension fund manager CPPIB picked up a 10.3% stake in Bharti Infratel Ltd for Rs6,193.9 crore. Mint had reported in February that Idea Cellular Ltd is looking to sell its telecom tower interests in two separate deals.
In December, Reliance Communications Ltd (RCom) signed a binding agreement with Canadian alternative asset manager Brookfield to sell a 51% stake in Reliance Infratel for Rs11,000 crore. RCom will continue as an anchor tenant in the tower assets.