Internet service provider Excitel Broadband has shelved its plan to raise funds, choosing to rely instead on internal cash flows to fuel its growth and expansion, chief executive Varun Pasricha told Mint in an interview.
The company, valued around $175 million, was previously exploring a fundraise of up to $200 million to facilitate an exit for its investors and to pursue growth through acquisitions. Last year, Mint reported that 15 companies including Partners Group AG, Canada’s Brookfield Asset Management, Macquarie and Actis signed non-disclosure agreements for a potential investment in Excitel. The company had appointed Avendus Capital as banker for the funding round.
“We are not in the market to raise money from anyone right now,” Pasricha said. “The trigger to raise money was because the VC fund which did the seed round in Excitel, and came on board in 2015, was looking for an exit. We did receive a few offers, none of which were acceptable to our investors, including those who were exiting.”
Exit pressure fades
While Pasricha did not name the investor that was seeking an exit, Bulgarian venture capital fund NEVEQ had made the initial seed investment of $1.5 million in Excitel in 2015. The company has raised about $17 million across three funding rounds from investors such as Impetus Capital, BlackPeak Capital, and others.
Excitel currently operates in about 44 cities and towns in India and has one million home broadband customers. It reported a ₹40 crore profit in FY26, its first ever, after posting a ₹74 crore loss the previous year, Pasricha said. Because of this turnaround, there is now no exit pressure from the investor, he added.
The company achieved this profit primarily by shutting down operations in about 10 small or underperforming markets, including Mumbai, Ambala, and Karnal, and focussing on its core markets such as Delhi, eastern Uttar Pradesh, Rajasthan, Hyderabad, and Bangalore. The company also reduced its depreciation cost by optimizing asset utilization, reusing more than 80% of the routers from users who cancelled their service. In FY26, Excitel’s revenue from operations grew 2.5% to ₹530 crore.
“We will in all likelihood cross ₹50 crore PAT (profit after tax) in 2026-27. This is essentially capital available to deploy to expand our services. So we want to really invest in a big way in rolling out the IPTV (internet protocol television) service,” Pasricha said, adding there is still a market opportunity for the company to grow two to three times over the next three to four years.
Asked about competition from telecom companies, Pasricha said their massive subscriber base gives them a distinct advantage over smaller internet service providers, allowing them to source OTT and broadcasting bundles at much cheaper rates. Despite these cost disadvantages, Excitel said it has been able to grow its subscriber base by offering value for money and high speeds in competing plans compared to telcos.
Regarding rising costs driven by the West Asia conflict and surging memory chip prices, Pasricha noted that internet service providers have seen a direct increase in set-top box prices. Available for $15-$16 until January, they now cost $25, he said.