Financial Daily from THE HINDU group of publications
Tuesday, Mar 30, 2004
Markets - IPOs
Data Access IPO likely in end-May
New Delhi , March 29
The initial public offer (IPO) of Data Access India, which was to have opened on Monday, is now likely to be scheduled for end-May.
This follows the clarifications sought by Securities and Exchange Board of India (SEBI) on Data Access' red herring prospectus, with complaints that the company had failed to divulge all details regarding its dues with Bharat Sanchar Nigam Ltd (BSNL), its foreign equity holding and FERA violations by a board member.
According to company officials, although clarifications on all the issues that have been raised by SEBI have already been submitted, it has now decided to postpone the date until after its full financial results for the year 2003-04 are cleared by the Board. This is to ensure that there is no doubt regarding its financials.
Data Access proposes to issue 5-crore equity shares of Rs 10 each to be offered to the public through the book-building process in a price band of Rs 17-20.
SEBI, it may be recalled had sent a letter to Data Access on Saturday seeking clarifications, along with an attached letter by an investor making allegations on certain issues. The company responded to the issues raised on the same day, however, since the SEBI office was closed, it decided to defer the IPO date.
The letter raised allegations, including FERA (Foreign Exchange Regulation Act) issues, money being owed to Bharat Sanchar Nigam Ltd (BSNL), disconnection of points of inter-connectivity, among others.
It was alleged that Data Access owed Rs 84 crore to BSNL as of December 2003.
However, company officials maintained that as per an internal agreement signed between the company and BSNL, Data Access could keep its dues pending for 15 days to two months. They noted that between December 2003 and March 2004, the company had paid Rs 300 crore to BSNL.
As regards the fact that BSNL had disconnected Data Access' points of interconnectivity, it was pointed out that of the 21 points of interconnectivity, three were not operational as these were not commercially viable because of low traffic.
The letter also alleged that one of the directors of Data Access had violated FERA, which has been strongly denied. The allegation about "unlawful" foreign equity in the company too has been refuted by the company.
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