Indiatimes, the Internet arm of media behemoth Bennett, Coleman & Co Ltd, is mulling to explore the capital market after diluting close to 6 per cent of its stake to WestBridge Capital. This was revealed exclusively to exchange4media by Mahendra Swarup, CEO, Indiatimes.
“We started talks to dilute around 20 per cent of our company and then finally settled for 5.8 per cent because we are no longer a startup. We are already an established business. One of the reasons why we went for private equities was to prepare ourselves for a final IPO,” Swarup said.
This is the first ever confirmation of an equity dilution from Indiatimes. Previously, there was speculation that Indiatimes had diluted 15 per cent with WestBridge Capital and Sequoia Capital for around $36 million. Swarup hinted that the figure was somewhat higher than what had been talked about so far.
On when the IPO might happen, Swarup said, “We won’t go for it prematurely as we don’t need money as such. We will go for an IPO when we will be sizable enough to be attractive to investors, when we know that we will be able to get something back to our investors.”
On the previous talks that Yahoo was also interested in a stake in Indiatimes, Swarup said, “We were in talks with many players, including Yahoo, but we decided not to go for a strategic partner at this point of time.”
Talking on a range of issues, Swarup said, “Indiatimes is on a high growth path. We have signed many international deals in the recent past. On the mobile side, we have signed an alliance with BBIT, which is the largest Italy-based European VAS provider. We have also signed a deal with Goal.Com, the largest software on the soccer front. Air Deccan has also formed an alliance with us, where they will sell their tickets only on our site, besides their own site. We have also signed an alliance with Sheemaru, wherein their entire library will be put on the Internet. Work on this front has already started.”
Swarup also dissented with the general perception that Rediff.com was the numero uno portal in India. “I vehemently disagree that Rediff is the No 1 portal in India. The only way they are No 1 is the number of people on their e-mail. Even our active users as proportion to our registered users is much more than Rediff’s active users. On revenue terms, too, we are much bigger than them.”
“In terms of page views, we are almost three times bigger that them. Our ARPU (Average Revenue Per User) is much higher than our competitor. I think it is a myth that Rediff is No 1. We are definitely larger than it by leaps and bounds. Rediff is way behind us. We have been profitable for the last three years whereas Rediff made profit in just the last quarter,” he asserted.
Swarup, however, declined to disclose the revenue and ARPU figures of Indiatimes.
When pointed out that Alexa ranked Rediff much higher than Indiatimes, Swarup said, “One has to look at Alexa differently. Rediff is one on Alexa, we are 20 different URLs on Alexa. One has to add up all those URLs to arrive at the ranking of Indiatimes.”
Swarup has definite plans to overtake Rediff on the only edge that he thinks Rediff has over Indiatimes. “I think the key of e-mail so far has been speed, and Rediff is known for its speed. But Rediff is soon going to lose that edge as with highspeed Internet connectivity, every email is going to become faster. We are already in the process of relooking our mail and making it the best mail possible. So, when the speed factor vanishes and the way we are growing, I think we will surpass Rediff in three years’ time on email front.”
On the challenge from Yahoo!India, Swarup said, “Yahoo!India potentially could be a big challenge to both Rediff and us. It has access to the best of technology. Yahoo is now changing its focus to news and media. If Yahoo!India copies what Yahoo has started doing internationally, then we may face a problem. But since the lead has already been taken by Rediff, Indiatimes and Sify in this country, their cost of growing in India is many, many folds more than us. They have to put out a really well thought out plan to compete with us.”