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OnMobile Opens IPO

Indian mobile value-added services provider OnMobile opened the book building process of its IPO today, looking to raise up to 4.5 billion Indian Rupees ($113.65 million).

OnMobile is offering 10.9 million shares, an 18.99 percent interest, priced between INR425 ($10.73) and INR450 ($11.37). The company will issue 8.6 million new shares along with 2.3 million existing shares. The process closes on January 29, after which the stock will be listed on the Bombay and National Stock Exchanges. Investors have picked up 52.67 percent of the shares so far.

The lead managers for the book building are ICICI Securities Ltd. and Deutsche Equities India Pvt. Ltd.

The company may not have picked the best time to go public given the volatility of the markets, but it did score a $30 million pre-IPO placement of a 5 percent stake: George Soros's Quantum Fund picked up 3.54, Bessemer India Capital took 0.9 percent, and 0.95 percent went to Wardferry India Reconnaissance Fund.

Incubated at IT services giant Infosys Technologies Ltd. (Nasdaq: INFY) in 2000, OnMobile was an early entrant into India's mobile value-added services space. Initially offering voice-based apps such as IVR (interactive voice response), contests, and ringtones, the company has since expanded into data services.

OnMobile says in its draft prospectus that revenues for the six months to September last year were INR1.16 billion ($29.3 million), up from INR567.4 million ($14.33 million) for the same period of 2006. Of those revenues, INR1.06 billion ($26.77 million) came from domestic value-added services. Earnings after tax climbed from INR113.01 million ($2.85 million) to INR305.24 million ($7.63 million).

The company will use the proceeds from the IPO to set up R&D centers, repay loans, expand its workforce, and make infrastructure investments in its offices in Bangalore, Mumbai, and New Delhi.

It also intends to expand its international operations and is on the hunt for acquisitions. The company made its first overseas purchase in September last year, acquiring French software firm Voxmobili. (See India's OnMobile Buys Voxmobili .)

— Nicole Willing, Reporter, Light Reading

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