Capital market regulator SEBI has cleared the IPO application of New Delhi-based Matrix Cellular International Services, taking the total number of approvals this year to 26. The international SIM card provider filed its draft red herring prospectus (DRHP) with SEBI through IIFL Holding on 23 June. The regulator issued its observations in this regard on 26 August. SEBI’s observation amounts to regulatory clearance to bring out the IPO.
The New Delhi-based company offers international SIM cards that reduce international roaming charges. In its DRHP, Matrix Cellular said the IPO will comprise of an offer for sale (OFS) of 1.51 crore shares by promoters and existing investors. Promoters Gagan Deep Singh Dugal, Manjit Singh Dugal and Urvashi Kaur plan to offer 25.64 lakh shares, while another 1.26 crore shares will be offered by Aleta Private Limited and AAJV Investment Trust. Aleta is investment vehicle of CX Partners and holds 1.58 crore shares or 37.82% stake in Matrix Cellular. AAJV Investment Trust will be selling 2.49 lakh shares from the 3.2 lakh shares it holds in the company. Combined holding of promoters in the company is currently at 61.4%.
Of the total, 75% shares have been reserved for qualified institutional buyers (QIBs) while Non-Institutional and Retail investors will be allotted 15% and 10% shares respectively. Since there are no fresh shares involved, the company will not receive any funds from the offer. The offer will constitute 36.1% of the post-offer paid-up equity share capital of Matrix Cellular.
This is the second attempt by Matrix Cellular’s promoters in recent years to offload some of their shareholding. Promoters tried to sell majority stake back in 2013 as well but the plan was eventually shelved as the promoters were unable to find a suitable buyer. According to its prospectus, Matrix Cellular posted a profit of INR14.76 crore on revenues of INR217.3 crore in the nine months ended 31 December 2014.
Matrix Cellular is banking upon the trend of more Indians going for international travel and since this trend is unlikely to abate any time soon, prospects of calling cards industry remain bright. While Matrix operates in a growing business, it faces immense competition from established telecom service providers. At the same time, technology advancements and smartphone penetration has given more options to overseas travelers.