You’re reading it here first: MediaNama has learned from multiple, reliable sources that Spice Digital, the mobile value added services business of BK Modi owned Spice Group, has initiated the process of filing for an Initial Public Offering (IPO) in India; according to some sources, the Spice Digital board has approved IPO plans. However, we have no clear indication of when the Draft Red Herring Prospectus (DRHP) will be filed with the Securities & Exchanges Board of India (SEBI). Upon being contacted, Spice Digital CEO Saket Agarwal declined to comment on IPO plans: no confirmation, but no denial either.

Spice Digital is a subsidiary of Spice Televentures, which is being amalgamated with public listed company Spice Mobility (previously Spice Mobiles), following an approval from Spice Mobility shareholders and creditors. On a conference call held to explain the amalgamation to Spice Mobility shareholders, Agarwal had disclosed that Spice Digital had registered revenues of close to Rs. 135 crore with an EBITDA margin of around 30% in the first 9 months of the 2009-10 financial year. The valuation of the company then was around Rs. 800 crore. Spice Digital powers the Mobstore for Idea Cellular, has won contracts for mobile governance applications in Himachal Pradesh and powers SMS updates for Indian Railways. It claims to be the market leader in the Music Radio service, whic is believed to be the third highest revenue generator for telecom operators, after P2P SMS and Caller Ringback Tones.

Spice Digital, in its earlier avatar of Cellebrum, had previously filed for an IPO in 2008; at that time, the company had reported revenues of around Rs. 70 crore for the nine month period. Our story on the Cellebrum IPO then, and the DRHP here. That file was closed following non-compliance with SEBI guidelines, and Cellebrum decided to not go ahead with the listing. At that time, Lehman Brothers owned 17.27% in Spice Digital.

The Season Of Mobile VAS IPO’s

Two Mobile VAS companies are already listed in India: Tanla Solutions was the first mobile VAS company to list in India in 2006, followed by market leader OnMobile Global in 2008. When it does file its DRHP, Spice Digital will be the third mobile VAS company waiting to list, and the largest in terms of topline of the three:

– Mumbai based upstart Planet41 filed its DRHP a few days ago, looking to raise Rs. 50 crore, with revenues of just Rs. 1.1 crore for the nine month period ended December 31st 2009. Our coverage here.
One97 Communications* also filed its DRHP in May 2010, to raise Rs. 120 crore from the capital markets. It reported revenues of Rs. 82.8 crore for the nine month period ended December 31st 2009. Our coverage here.

So who’s next: Bharti Group company Comviva? Or IMI Mobile*, which is in the process of acquiring AIM listed WIN Plc?

* Disclosure: Both IMI Mobile and One97 Communications have advertised with MediaNama in the last 3 months