Malaysian tycoon's Maxis deal spells boom for India's Aircel
Wednesday, May 2, 2007
MALAYSIAN tycoon Ananda Krishnan's plans to buy out Maxis Communications, the country's largest mobile operator, will boost the company's plans for India, says a report in the financial daily, the Economic Times, quoting analysts. Krishnan, says the report, owns just under 48 per cent of Maxis, which has a controlling stake (74 per cent) in Aircel, India's fifth largest GSM player with over five million subscribers. "Aircel stands to gain heavily as Krishnan may look at re-listing Maxis offshore to raise foreign capital, while also infusing his personal wealth to fund international expansion. "More so, considering Maxis had recently said it would need an additional US$3 billion to expand operations in India in future," says the report crediting the information to a leading brokerage house.
Endorsing the same view, the Deutsche Bank has been quoted in a research note as saying that the takeover would allow Krishnan to "more freely utilise his own wealth" if any of the company's two overseas ventures India's Aircel and Indonesia's PT Natrindo Telepon Selular required more capital than its balance sheet allowed. Maxis is attractive not just for its quality assets, but also for its "strong defensive Malaysian position and Indian growth potential" the research note said. Maxis, says the report, facing saturation in its home market (where it has over eight million subscribers) has been forced to tap emerging markets such as India and Indonesia.
The company's profits have surged 46 per cent over the last 12 months, riding on strong subscriber gains, both at home and in India. In fact, Aircel accounted for 13 per cent of Maxis' fourth quarter revenue. Maxis Communications Group CEO Jamaludin Ibrahim had recently told the paper that the company would invest over Rs20 billion (US$500 million) in its Indian operations in 2007-2008, adding that it had set a target of reaching eight million subscribers during the period, the report says.
Maxis had invested about Rs 27 billion (US$675 million) in Aircel of which Rs 13.5 billion (US$337 million) was paid to the Department of Telecom (DoT) for entry fee for licences in 14 new circles in the country.
Bernama
Endorsing the same view, the Deutsche Bank has been quoted in a research note as saying that the takeover would allow Krishnan to "more freely utilise his own wealth" if any of the company's two overseas ventures India's Aircel and Indonesia's PT Natrindo Telepon Selular required more capital than its balance sheet allowed. Maxis is attractive not just for its quality assets, but also for its "strong defensive Malaysian position and Indian growth potential" the research note said. Maxis, says the report, facing saturation in its home market (where it has over eight million subscribers) has been forced to tap emerging markets such as India and Indonesia.
The company's profits have surged 46 per cent over the last 12 months, riding on strong subscriber gains, both at home and in India. In fact, Aircel accounted for 13 per cent of Maxis' fourth quarter revenue. Maxis Communications Group CEO Jamaludin Ibrahim had recently told the paper that the company would invest over Rs20 billion (US$500 million) in its Indian operations in 2007-2008, adding that it had set a target of reaching eight million subscribers during the period, the report says.
Maxis had invested about Rs 27 billion (US$675 million) in Aircel of which Rs 13.5 billion (US$337 million) was paid to the Department of Telecom (DoT) for entry fee for licences in 14 new circles in the country.
Bernama
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