Matrix Cellular – the company best known for its global SIM cards that reduce international roaming charges – is planning to tap the primary market in a bid to raise as much as INR500 crore. The New Delhi-based company is likely to file its Draft Red Herring Prospectus (DRHP) with capital market regulator Securities and Exchange Board of India (SEBI) over the next 10 days, two people with knowledge of the matter told Economic Times.
The company is backed by private equity player CX Partners which holds 38% equity stake while promoter Arun Batra owns majority shareholding in the company. CX Partners is believed to have invested INR166 crore in the company in 2011. Company promoters tried to sell majority stake back in 2013 as well but the plan was eventually shelved as Matrix was unable to find a suitable buyer. Interestingly, Matrix Cellular’s valuation is still likely to hover around INR1,200 crore – indicating no change from the last time when it tried to sell majority stake to a strategic partner last time. The issue is likely to be managed by India Infoline while CX Partners is expected to be the advisor.
The company’s business model primarily revolves around the growing trend of people travelling overseas. According to some estimates, nearly 1.5 crore tourists go for outbound travel from India every year. Since the roaming charges of native mobile operators are quite high, short term international calling cards come handy. This trend of more Indians going for international travel is unlikely to abate any time soon and thus, 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.
India’s primary market is seeing renewed interest from companies and existing investors as a way to offload their shareholding. Market regulator SEBI has given approval to 17 companies for IPOs this year while seven companies have already raised funds through the route. However, only a few like VRL Logistics have been successful in maintaining a balance between returns for existing shareholders and IPO investors.
