Telecom Research & Development entity Sasken Communication Technologies Ltd has received a $10 million equity investment from global networking major Nortel Networks, even as the Bangalore-based company is planning to raise Rs 100 crore (Rs 1 billion) through an initial public offer.
"This investment will strengthen Nortel's presence in India, an important market for the company, as a close relationship with a local supplier will provide an increased access to the country's market," Sasken Communication chairman and CEO Rajiv Mody told reporters in Mumbai on Thursday.
The investment would also help in bringing in greater capabilities to customers in critical emerging markets of India and Asia Pacific region, he said.
However, the company did not disclose the number of shares picked up by Nortel, even though they added that the US based company would not hold any controlling powers nor would have any directors on its board.
Sasken Technologies would use this investment to fuel its growth through acquisitions in the telecom space both in the country and internationally, even though no companies have been shortlisted, Mody said.
Nortel India managing director Ashoka Valia said that India is a growing market and this investment would help in getting a stronger foothold in the country.
Meanwhile, Sasken Communication in planning to raise Rs 100 crore (Rs 1 billion) from the capital markets through an IPO, which is slated to open by the second half of this year.
According to sources, the company has finalised its financial consultants and lead managers for the proposed IPO, even though it is yet to file a red herring prospectus with the market regulator.
On the contract with Bharat Sanchar Nigam Ltd, signed in August 2004, Valia said the first phase would be completed by this year.
BSNL had awarded one of its largest contract for supply of equipment for 11 million cellular lines to Nortel and Nokia. The contract valued at $860 million, envisages supply of GSM-based mobile network across the country.
This is also the biggest contract in India, considering Nortel was awarded supplying of material for 11 million cellular lines of the total 35 million lines in the country.
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