MUMBAI
:
Government-backed National Investment and Infrastructure Fund (NIIF) has agreed to invest $200 million ( ₹1,658 crore) in digital infrastructure company iBus for a controlling stake, two people aware of the development said.
iBus Network and Infrastructure Pvt. Ltd, which is backed by Morgan Stanley Infrastructure Partners, will use the money to finance its expansion. “This is largely a primary investment,” the first of the two people cited above said on condition of anonymity.
NIIF is investing through its Master Fund, which closed at $2.34 billion in 2020. While this fund invests only in infrastructure projects, NIIF’s other funds invest in other sectors as well. NIIF was set up by the government in 2015 to support India’s infrastructure sector. The Master Fund has previously invested in companies such as Ayana Renewables and port operator DP World.
Mint first reported on 29 January 2023 that iBus was in talks to raise capital to expand its services and solutions to 5G, internet of things (IoT) and Wi-Fi. The company had appointed Avendus Capital to arrange the transaction.
Queries sent to NIIF, iBus Networks, and Avendus Capital remained unanswered till press time.
Bengaluru-based iBus builds digital infrastructure such as Wi-Fi connectivity within buildings, and is testing projects on IoT. The company expects rising 5G use to push up data consumption and support its growth.
The NIIF funding is likely to be the largest fundraise so far for iBus. In 2021, Morgan Stanley invested ₹150 crore (then $20 million) in the company through its North Haven India Infrastructure Fund. A year later, iBus raised ₹125 crore from Japan’s Nomura Holdings, and $40 million from investors including Enam’s Vallabh Bhansali, US-based N Squared and T.V. Mohandas Pai.
Once concluded, this will be the Master Fund’s second investment in digital infrastructure. In January 2023, Singapore-based Digital Edge set up a platform with NIIF to create hyperscale data centres across India.
Founded in 2012 to improve last-mile telecom connectivity, iBus has made several acquisitions. In 2021, it acquired Ubico Networks for ₹100 crore to improve its in-building and in-campus business. In 2022, it acquired D-VoiS Communications’ Wi-Fi managed service assets to get access to education and co-living sectors, besides hospitality. In August 2023, iBus acquired Sheltera Construction International Ltd to build its infrastructure in small cell and optic fibre networks.
“The business has inherent strengths of high client stickiness given the five to seven-year MSAs (master service agreements) with the telcos, offering revenue visibility and exit penalties, annual rental escalation, and timely payments from tenants. Further, the infrastructure industry remains critical for the telecom service provider industry. With likely network expansion by the strong telcos, especially for data services, healthy demand is expected in the long run,” a January 2022 ICRA credit rating report on the company said.
iBus Networks reported consolidated net sales of ₹86.47 crore and profit of ₹1.91 crore in in FY22. In FY21, it had reported consolidated net sales of ₹35.36 crore and profit of ₹67 lakh, according to data platform VCCEdge. The company’s latest financials could not be ascertained.