Viom Networks opts out of race to acquire Reliance Infratel

KOLKATA: Telecom towers company Viom Networks has opted out of the race to acquire Reliance Infratel - the tower arm of Anil Ambani-promoted Reliance Communications - following differences over valuation, a senior executive with direct knowledge of the matter told ET.

The company, which had recently evinced an interest to acquire RCOM's tower assets, has decided not to initiate formal discussions as it feels Reliance Infratel's reported valuation of $5 billion is unrealistic.

Viom is 53% controlled by the Tatas. The Kolkata-based Kanorias, who are founders of Srei, hold about 27% while foreign institutional investors (FIIs) own the balance 20%.

"We were indeed interested in acquiring RCOM's tower business, but there is a mismatch in the seller's expectation on the valuation front and our assessment. Which is why, we have decided not to initiate formal discussions with the RCOM management," Srei vice chairman Sunil Kanoria, who is also director, Viom Networks, told ET.

RCOM declined to respond to ET's email query on these differences with Viom over the valuation of its tower business.

The country's second-largest mobile phone company by customers, RCOM, had recently said it was evaluating offers from several companies keen to acquire a controlling stake in its tower arm.

But Viom executives with direct knowledge of the development said a potential deal got nipped in the bud for several reasons. Viom's shareholders, for instance, believe Infratel's enterprise valuation will take a hit in light of the controversies dogging the telecom sector.