Nelco, is one of the smallest companies in the listed universe of US $ 116 Bn Tata group, which has huge potential to grow in times to come. Nelco operates in a highly regulated space and holds the VSAT License, Internet Service Provider (ISP) License as well as the Inflight & Maritime Communication (IFMC) license issued by Department of Telecommunication, Government of India (DOT)
Technology and telecom services will continue to play a significant role in a post pandemic World and these changes are difficult to be reversed in future. The New Education Policy (NEP) released in 2020 will bring major transformational reforms in the education sectors and will open a large market for satellite based broadband services. Telecom players are continuously facing stress and it will be difficult to drive large investment in telecom capabilities for rolling out services to the remotest corner of India. In such a situation Satellite communication may emerge as a viable alternative. Further pandemic has resulted in an increased demand for digitalization, virtual communication, remote management applications and cyber security needs, all of which is dependent on the back bone of reliable internet services. These changes will result in the robust growth of SatCom based digital solutions, for providing services in the remote parts of the country.
Space has been recognised as a key area of growth and the Union government intends to reforms the space sector by bringing in private players’ participation, Earlier Government released the draft of a new Spacecom Policy 2020 for regulating the commercial use of satellites, orbital slots, and ground stations for communication needs and authorization for setting up new communication satellites and ground stations. Draft policy will increase the competitiveness of Indian players in satellite communication space. We can expect the Government to notify the policy soon.
The global satellite industry has evolved faster in the last few years due to commercialisation of space and advanced applications. large investments have flown into space start-ups for innovations and technology advancements. Low Earth Orbit (LEO) satellite market is emerging globally due to increased space-based applications and research for monetising prospective space economy. As newer business models are emerging globally, we can assume that India’s space sector will also adopt the space tech and application for addressing the global needs. Satellite Communication will play a pivotal role for penetration of digital services in the remotest corners of the earth.
In India Bharti Airtel, Hughes Escorts Communications, ITI, Software Technology Park of India etc are some of the key players in Commercial CUG VSAT Services space. Earlier, UK Government and Bharti Global acquired the ‘OneWeb’, for offering broadband connectivity services, through a constellation of 650 LEO satellites. Consortium has invested $1bn of new equity and has appointing Neil Masterson as the CEO of One Web. Elon Musk backed SpaceX and Amazon are also in the race for tapping Indian Market.
Satellite communication market is expanding. Newer satellite technologies like High Throughput Satellites (HTS) and LEO will be in demand. Further we are heading towards 5 G applications, and various advance and futuristic applications in defence, rural connectivity, IoT etc will requires satellite communication
Nelco is part of the tata Group Company and one of India’s leading VSAT providers in the country providing pan-India spread and remote operations through its cost-effective satellite communication services. Telesat, one of the major global satellite players with which Nelco has signed a cooperation agreement
Company is preferred partners for the Government for implementing key programs. Its services are presently being used in various areas and have potential to grow in the areas of Banks ATM connectivity, Oil & Gas exploration, Panchayat connectivity, education, healthcare, warehousing and public distribution system especially in rural and remote locations, Education, Renewable Energy, IFMC Services eCommerce, logistics, mining and construction etc
Nelco’s outstanding share capital is approx. 2.28 crores. 50.09% of the shares are held by the promoter group. Tata Power holds 48.64%, AF-TAAB Investment (subsidiary of tata power) holds 1.44% and an insignificant holding of approx. 1000 shares are held by titan. According to BSE data, as on 20th Aug, Nelco has Market Cap of 1084 Crores, and free float Market cap of approx. Rs 500 Crores.
Given the Global Development and trends, their may be a huge potential for Nelco in times to come.
(This is not an Investment Advice)
Bureau Galactik Views