OnMobile Global lists at 19% premium

OnMobile Global lists at 19% premium

Mumbai: OnMobile Global Ltd, the first Indian company in the fast growing mobile value-added services (VAS) space to go public, made its debut on the Bombay Stock Exchange on Tuesday, at a premium of 18.6% from its issue price.

OnMobile shares, priced at Rs440, closed at Rs521.90 each, giving the firm a market capitalization, which is based on the total number of shares outstanding, of Rs3,037 crore.

The share offer, which closed on 29 January, was oversubscribed 10.95 times. OnMobile’s initial public offering paves the way for other companies in the sector, such as Bharti Telesoft Ltd, One97 Communications Pvt. Ltd and Cellebrum.com Pvt. Ltd, to now try and go public.

In past two years, the sector has received more than $150 million (Rs598.5 crore) in venture capital (VC), making it the highest funded start-up segment. OnMobile Systems Inc., the US-based holding company, owns a 60% stake in OnMobile, valued at about Rs1,822 crore. Promoters of the holding company include founders Arvind Rao, Chandramouli Janakiraman, Infosys Technologies Ltd, and a few other investors. Rao and Raman also own 15% stake directly in OnMobile. The Infosys-incubated company has picked up several investors along the way. It received its first round of VC funding of $15 million from Argo Capital Management Ltd, HNQ Asia Pacific and Satwik Venture Capital Partners in 2000. Argo also invested $3.5 million in a follow-on round in 2002.

In 2006, Deutsche Bank AG, Goldman Sachs Group Inc. and Polygon Investment Partners invested $27.8 million for a 10% stake. Of this, Polygon, HNQ and Satwik made a partial exit in a pre-IPO placement round, selling 5% stake for $30 million to Bessemer Venture Partners, George Soros’ Quantum Fund and Wardferry India Reconnaissance Fund. None of the others has exited. Now Argo owns 28% stake in the company, worth $212.5 million, 18.5 times its investment of $11.5 million.

OnMobile will use part of the capital raised to fund acquisitions in overseas markets. It plans to acquire at least two companies this year, says Sandhya Gupta, M&A head.