Largest investor in OnMobile plans to exit stake: Sources

After OnMobile CEO Arvind Rao stepped down from the company owing to a KPMG report regarding its corporate governance policies, there may be more bad news in store for the company.

CNBC-TV18's Kritika Saxena, quoting sources, reports that stake-holder Argo Global Capital is planning to exit the company. Argo Capital is in talks with a few of global telecom companies regarding the sale of its stake

Argo Capital has been a stake-holder in OnMobile for a while. Argo Capital is a global venture capital firm which focuses on the telecom and wireless communications sector and the head of Argo Capital is the chairman of the board at OnMobile..

Argo Global Capital is the single largest investor in OnMobile Systems. OnMobile Systems is a promoter-holding company. So overall, the promoters' shareholding in OnMobile is around 49% and of that OnMobile Systems has around 35%.

So the exact shareholding of how much Argo Capital holds in OnMobile Systems is not known, but it is estimated to be 29-30%.

So if Argo does go ahead with the stake-sale, it could trigger an open offer considering the shareholding will be up 20-22%. According to reports, OnMobile is on the acquisition lists of several global IT firms.

OnMobile has significant assets across the globe and has been doing very well from a purely operational point of view. So if Argo Capital manages to find a buyer, it will be an important stake sale regardless of the kind of problems that the company has been currently facing.