Tikona Digital Networks, the wireless Internet broadband service provider, said on Wednesday that it has offloaded a 70% stake to three private equity investors, including Goldman Sachs Investment Partners, Indivision India Partners and Oak India Investments, and has secured funds to the tune of Rs 500 crore to fund its expansion plans.
The broadband service provider will use the funds to expand its network coverage to 50 cities by 2010 from 10 cities, currently including Mumbai and Hyderabad.
Tikona was founded in 2008 by former Reliance Communication management members — Rajesh Tiwari and Prakash Bajpai. While Bajpai was serving as the president and CEO at Reliance Communications’ broadband division, Rajesh Tiwari was the group director at Reliance-ADAG. Both quit the firm in late 2007 to started their own venture.
The company is looking at raising additional funds of up to Rs 1,200 crore by 2011 and has already submitted its proposal to the Foreign Investment and Promotion Board (FIPB) to raise the foreign direct investment (FDI) in the firm to 74% by issue of compulsorily convertible debentures (CCDs) and equity shares to existing and new foreign investors.
“There is a sectoral cap of 74% and hence, we need government approval for raising funds. We have already applied to the FIPB with a proposal to raise up to Rs 1,200 crore,” Mr Bajpai said.
Source: Economic Times