Telecom value-added services provider One97 Communications is hopeful of entering the capital market with Rs 120-crore initial public offer by the end of this year, a top company official said today.

"We are hopeful to hit the market by the end of current year, subject to the approval from Sebi," One97 Communications Chairman & Managing Director Vijay Shekhar Sharma told PTI.

The Noida-based company, which filed the draft prospectus in May this year, is awaiting approval from the market regulator Securities and Exchange Board of India (Sebi).

One97 Communications, founded by Vijay Shekhar Sharma and backed by venture capital investors, including Intel Capital and SAIF Partners.

The company, founded nearly one decade ago, expects that the upcoming third generation (3G) services in the country would be a landmark and will help it to generate more revenue in coming period.

The Indian telecom VAS market is growing fastly and with the roll out of 3G services, it would provide more opportunity to niche players like One97, according to Sharma, who is also the promoter of the company.

3G-based value added services (VAS) are expected to contribute significantly to the revenues, he added.

VAS comprise SMS, mobile internet, music or enterprise applications. Mobile VAS constitute 5.4 per cent of the total mobile services market revenues in fiscal 2009 and is expected to become over Rs 12,000 crore market in next five years.

The company offers services in three categories--network, consumer and enterprise.

The IPO proceeds will largely be invested in technology deployment to launch some new services and scale the current offerings both in India and overseas, Sharma said.

The firm may think closing QIB (qualified institutional buyers) book a day before the issue closing date, One97 Chief Financial Officer Vikas Thapar said.

This model (entire one day for retail and high net worth individuals) has helped several companies in attracting more participation from the non-institutional investors.

This model was followed in the recently-concluded public offers of SKS Microfinance, Bajaj Corp and state-run Engineers India Ltd, where a huge response was seen from retail and high networth individual categories.

IDFC Capital and Avendus Capital are book running lead manager to the issue.