ACT Fibernet plans to use IPO funds to expand operations

Atria Convergence Technologies (ACT), the third-largest internet service provider in the country, plans to use the funds raised from its initial public offering (IPO) to boost the reach of its operations.

In April, the company filed its draft red herring prospectus with the Securities and Exchange Board of India (Sebi). It is looking to raise ₹800 crore.

The company, which is mainly present in southern India, has expanded to Delhi and could look at other cities. As it expands, it could also look at increasing the number of data centres it operates to support its business.

“We have 6.9% market share with a presence in just 12 cities. We have seven data centres and are building two more. If there is demand in the newer areas, we could look at placing data centres in those locations,” Bala Malladi, chief executive officer of Atria, told ET. He declined to give specifics about the future because the company has filed for its initial public offering.

The company has said it will use the proceeds from the initial public offering to boost its infrastructure, pay down debt and for general corporate purposes.

ACT has shown 39% revenue growth in 2017 and 41% revenue growth in 2016. The company had about 1.28 million internet subscribers and 0.71 million cable TV subscribers. ACT’s market share in Hyderabad, Chennai and Bengaluru as on December 2017 was about 60%, 27%, and 28%, respectively.

The fibre broadband network currently covers over 5.4 million homes, a metric the industry calls ‘passed through’ and which measures the potential reach of the existing infrastructure. CEO Malladi said that the company will not see a significant shift in how it operates after it lists on the public markets.

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