New Enterprise Associates to buy 50% stake in HFCL Infotel

New Enterprise Associates (NEA), a US-based private equity firm, may buy up to 50% of HFCL Infotel, a listed cellular service provider arm of HFCL. The stake is estimated to be valued at Rs. 350 crores. The company may reportedly go for a preferential allotment to allow NEA to pick up to 50% stake in the company.

HFCL Infotel offers CDMA-based services in Punjab, including fixed-line, fixed wireless terminal, and digital mobile services. As of November-end, HFCL Infotel had about 327,000 subscribers. The company also provides leased line services and PCO services. The company is estimated to have an enterprise value of $230-250 mn (including a debt of about $80 mn). As per the current shareholding, the promoters hold 62% in HFCL Infotel, private corporate bodies hold just over 30% and 2.51% is held by the public.

NEA has been scouting for buys in India. The company plans to invest $125-175 mn from its recently-closed $2.5 bn fund. Recently, it also created an Indian arm, NEA IndoUS, which is raising a $150 mn fund ($30 mn provided by NEA) to primarily put into start-ups here.

Read more in The Economic Times article.