Tech Mahindra IPO to hit market soon
IT solutions company Tech Mahindra on Tuesday said it would stick to its schedule for the initial public offer, despite the turbulent stock market and decreasing demand for IPOs, reports The Economic Times.
"After we get the approval from Sebi, we will check with the investment bankers. The market doesn't make difference... During bad markets, demand for good scrips is very high. We will past muster," Tech Mahindra CEO Vineet Nayyar told media.
He said Sebi clearance was likely to come by the third week of next month and the company will approach the market soon after.
The company would offer 11% of equity through the IPO to mobilise funds for expansion of its services delivery infrastructure.
Tech Mahindra is planning to have centres in Noida, Chennai, Hyderabad, Kolkata and Chandigarh with an investment of Rs 350 crore (Rs 3.5 billion). The centres in Kolkata, Chandigarh and Noida will have capacity to seat 2,000 professionals each.
Tech Mahindra is planning to develop its centres in Kolkata, Chandigarh and Pune as special economic zones, which offer a host of tax concessions.
The company has recently acquired Axes Technologies and is open to more acquisitions and joint ventures, if they fit in the overall strategy of growth.
Nayyar said the company is gradually reducing reliance on British Telecom and expanding its client base including in geographies as diverse as Egypt, Qatar, Singapore and China.
In the last three years, the company's revenue has grown by around 30% from Rs 742 crore (Rs 7.42 billlion) in 2004 to Rs 1,245 crore (Rs 12.45 billion) in 2006. Its net profit has grown from Rs 64 crore (Rs 640 million) to Rs 235 crore (Rs 2.35 billion) during the same time.