OnMobile - Tipping Point ??

I happened to read about this company OnMobile a few days back. It was listed on BSE with a starting rate of INR 450 per share. 109,00,000 shares issued. So that means a market cap of nearly INR 490.5 crore [assuming a share price of Rs. 450 per share]....CRISIL rating of 4/5 meaning "above average" fundamentals.

OnMobile basically sells content for cell phones. stuff like jokes, ads etc which keep popping up on your cell. And apparently this is huge business because this company made Rs. 1,329.7 million, up at a compound annual growth rate (CAGR) of 80.2 percent from 826.2 million in the 2004-05. Profit after tax was Rs. 337.2 million in 2006-07, up from Rs. 140.2 million in 2005 at a CAGR of 55.1 percent. 90 percent of 2006-07 revenue was from revenue sharing agreements with carriers [B2B].

Now we come to the most interesting part....where did this company start from? Believe it or not, this was an offshoot from my former employer...Infosys. This to me atleast, was an amazing find. For the first time I see a company being spun off in an Indian scenario. OnMobile seems to have inherited the good genes from its parent.

Personally what interests me is the question - Are such spin offs the beginning of a new trend in Indian businesses. If so then this would be an amazing ground for budding entrepreneurs who have ideas, but not the time to take those ideas and build it into a successful corporation. I hope that now our so called biggies look at seriously spinning off companies.....offering the parent a solid investment vehicle. Maybe this could be the ultimate perk....if you perform well, we give you enough money [and valuable advice if required] to start off on your own.

I do hope that this is not a one off case and hopefully is a tipping point to a new trend in Indian business.