Indian IPO

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Wednesday, July 25, 2007

Bang Overseas files DRHP with SEBI

Bang Overseas, a Mumbai-based company engaged in the textile, apparel and retail business, has filed its draft red herring prospectus (DRHP) with the Securities & Exchange Board of India (SEBI) to enter the capital market with an initial public offering (IPO) of equity shares.

The company proposes to issue 3,500,000 equity shares of Rs 10 each for cash, at a price to be decided through a 100% book building process. The equity shares of the company, offered through this IPO, are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange of India.

The issue includes an employee reservation of 100,000 equity shares and the net issue will comprise 3,400,000 equity shares of Rs 10 each at a price to be decided at premium to be decided through a 100% book building process.

At least 50% of the issue will be available for allocation to qualified institutional bidders (QIBs) on a proportionate basis, of which 5% shall be available to Mutual Funds only. Further, upto 15% of the Issue shall be available for allocation on a proportionate basis to non-institutional investors and upto 35% of the issue shall be available for allocation on a proportionate basis to retail individual investors. The Issue will constitute 25.81% of the post-issue paid-up capital of the company.

Mr Brijgopal Bang, managing director, Bang Overseas, said, "Bang Overseas plans to expand its distribution network by adding 90 retail outlets across the country for its Thomas Scott branded apparel products and fashion accessories. The company also proposed to establish an apparel manufacturing unit in Kolar near Bangalore with a capacity of 20,000 pieces per day. The Company also plans to provide warehousing and logistics facilities to establish an efficient supply chain management for its retail operations."

It is engaged in textile and apparel business. It has two apparel manufacturing units in Bangalore. It ventured into the ready-to-wear men's garments segment and unveiled the brand name "Thomas Scott" in 2002. Its products are presently retailed through 155 points of sale comprising of its own retail outlets and large format stores. It has in-house designing capabilities, existing distribution network and the requisite information technology systems.

The book running lead managers to the Issue is Almondz Global Securities Ltd.

Tuesday, July 17, 2007

Mundra Port to go ahead with IPO plans on SAT reprieve

Backed by Securities Appellate Tribunal (SAT) order, Adani Group is now planning to open the Rs 1,500 crore IPO of Mundra Port and Special Economic Zone (MPSEZL) in the first fortnight of September. The IPO was originally slated to open in end July.

“We think that with today’s interim injunction against the SEBI order, we can go ahead with the MPSEZL initial offer as per the terms and conditions,” a senior official of Adani Enterprises told. Adani Enterprises – formerly Adani Exports – is the promoter of Mundra Port SEZ.

On the expected timing of the issue, he said: “Since August is holiday in larger part of US and Europe, we are now planning to open the issue between September 1 and 15.”

Adani Group has filed the draft red herring prospectus (DRHP) with SEBI in March. However, in its order in May this year, SEBI had barred Adani Group promoters from entering the market for two years.

MPSEZL is the logistics arm of Adani group, and the rest of the businesses are under Adani Enterprises.

Mundra Port is the first company from the SEZ and port sector to hit the capital market. DSP Merrill Lynch, JM Morgan Stanley, SSKI, Enam Financial and SBI Capital Markets as lead managers to the MPSEZL issue.

The proceeds of the issue would be utilised for the further development of the port and SEZ, reports The Hindu Business Line.

Everonn Systems fixes issue price at Rs 140/sh

Everonn Systems India, a fully integrated education and learning Solutions Company, has fixed the issue price at Rs 140 per share, the higher end of the price band of Rs 125-140.

The company had come out with a public issue of equity shares of face value of Rs 10 each, for cash at a premium aggregating to Rs 50 crore. The issue, which was a 100% book built issue, was oversubscribed 131 times. The issue received an overwhelming response with the qualified institutional buyers’ portion being oversubscribed by more than 92 times, the retail portion by 124 times and the non-institutional portion by 278 times.

Everonn Systems has a track record of consistent growth. Over the period FY03 to FY07, the Company’s revenues grew at a CAGR of 28% and profit after tax at a CAGR of 86%. For the year ended March 31, 2007, the Company recorded a Turnover of Rs 4304.46 lakh and its adjusted profit after tax stood at Rs 486 lakh.

Everonn Systems has embarked on expansion project to be funded by IPO proceeds and internal accruals. Everonn Systems has budgeted an outlay of Rs 3000 lakh for IT Infrastructure Services. The company plans to expand their operations close to 1000 schools every year. The company will allocate Rs 1725 lakh from their IPO proceeds towards capital expenditure for Virtual and Tech Enabled Learning Solutions. Company would also utilize the funds raised from the IPO towards brand building; funding for proposed Mergers & Acquisitions and to invest in the proposed subsidiary.

Centrum Capital is the sole book running lead manager to the issue.

MidValley Entertainment files DRHP with Sebi

MidValley Entertainment has filed draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for its initial public offering (IPO).

The company proposes to come out with a public issue of 90 lakh shares of face value Rs 10 each for cash at a price to be decided later.

Based out of Chennai, MidValley Entertainment is engaged in media and entertainment business. With operations in 69 theatres of distribution territories of Hyderabad and Tamil Nadu, it intends to be one of the leading theatre chains in Southern India.

MidValley Entertainment aims to create a strong theatre chain by acquiring existing single screen theatres on lease and convert them into digital theatres bringing latest releases to the theatres, reports The Economic Times.

Sunday, July 15, 2007

IPO corpus will earn DLF Rs 1.3 crore a day

India’ largest real estate developer DLF is making a cool Rs 1.3 crore a day merely by parking its IPO money in mutual funds, CNBC-TV18 reports.

Out of Rs 9000 crore raised from its IPO, realty major DLF has parked more than Rs 7000 crore in liquid funds. Reliance and ICICI Prudential have each got an inflow of Rs 1500 crore into their debt funds.

Another Rs 1000 crore has gone into the liquid schemes of Deustche AMC. Liquid funds of mutual funds like ABN Amro, UTI, Kotak and Birla Sun Life have also garnered Rs 300-500 crore each.

Company officials say that they are in the process of deploying this money for their business plans. Until then, this money will sit with mutual funds and with liquid funds giving returns of about 7.5%, this IPO corpus will earn DLF a solid Rs 1.3 crore a day.

Central Bank sets IPO price band at Rs 85-102/sh

The public sector institution, the Central Bank of India is entering the capital market with an initial public offering (IPO) of 80,000,000 equity shares of Rs 10 each for cash at a price to be decided through a 100% book building process.

The price band for the issue, which opens for subscription on July 24, 2007, and closes on July 27, 2007, has been fixed between Rs 85 per equity share and Rs 102 per equity share. After the issue, the shareholding of the Government of India in the bank will come down to 80.20%.

The issue includes a reservation of 4,000,000 equity shares for eligible employees of the bank and the balance 76,000,000 equity shares would constitute the net issue to the public. The issue will constitute 24.68% of the pre-issue and 19.80% of the post-issue paid-up equity capital of the Bank. The issue has been rated by the credit analysis and research (CARE) as CARE IPO 4 which indicates above the average fundamentals.

At least 60% of the net issue to the public shall be allotted on a proportionate basis to qualified institutional buyers (QIBs), of which 5% shall be available for allocation to Mutual Funds only and the remaining QIB portion shall be available for allocation to all the QIB bidders, including Mutual Funds, subject to valid bids being received at or above the issue price.

Further, not less than 30% of the net issue shall be available for allocation on a proportionate basis to the retail individual bidders and not less than 10% of the net issue shall be available for allocation on a proportionate basis to non-institutional bidders, subject to valid bids being received at or above the issue price.

The issue proceeds will be utilized to augment the capital base of the bank to meet the future capital requirements arising out of the implementation of the Basel II standards and the growth in assets, primarily the loan and investment portfolio due to the growth of the Indian economy and for other general corporate purposes.

Considered to be the third largest Bank in India in respect of number of branches (Source: The Reserve Bank of India’s Report on Trend and Progress of Banking in India, 2005-06) across 27 States and 3 Union Territories, the Central Bank of India, as on March 31, 2007, has a domestic branch network of 3,194 branches comprising 1,341 rural, 759 semi-urban, 575 urban and 519 metropolitan branches. As at March 31, 2007, the Core Banking Solution (“CBS”) had been implemented in 324 branches and 29 extension counters, covering approximately 35.40% of the Bank’s business.

The Bank, currently wholly-owned by the Government of India., is focussing on three main areas: corporate; retail and agriculture. As at March 31, 2007, the Bank had a workforce of 39,055 employees serving over 25 million customers.

The equity shares of the bank are proposed to be listed on the Bombay Stock Exchange and the National Stock Exchange. The book running lead managers to the issue are: ICICI Securities Primary Dealership Limited, Citigroup Global Markets India Private Limited, Enam Financial Consultants Private Limited, IDBI Capital Market Services Limited and Kotak Mahindra Capital Company Limited. Intime Spectrum Registry Ltd is the registrar.

The bank posted growth of 3.96% in net interest income at Rs 2,474.43 crore (Rs 24.74 billion) for FY07. Its net interest margin stood at 3.16%.

Advances grew by 38.18% to Rs 51,795.48 crore and deposits rose by 24.51% to Rs 66,482.65 crore.

JSW Energy to float IPO, aims to raise Rs 1000cr

Sajjan Jindal-promoted JSW Energy will come out with a Rs 1,000 crore initial public offering (IPO) for funding its expansion programmes.

Seshagiri Rao, director-finance, JSW Steel, said plans for the IPO would be finalised over the next few months.

Post-issue, promoters’ stake in the company would be diluted by around 10%. At present, promoters hold 100% stake in the company.

The IPO proceeds would be used for funding JSW Energy’s Rs 12,000 crore expansion. “The investment would be made over a period of three years,” he said.

JSW Energy is setting up a 1,000 mw lignite-based power plant in Rajasthan and a 1,200 mw coal-based plant in Maharashtra.

JSW Energy has signed a memorandum of understanding (MoU) with the government of Gujarat to generate a 1,000 mw power in Junagarh district.

Plans are on the anvil to execute power projects in West Bengal, Jharkhand and Andhra Pradesh. The company is also pursuing plans to enter into the hydel energy sector in Himachal Pradesh and Sikkim. JSW is planning to foray into the transmission sector.

The company also supplies power to JSW Steel and Power Trading Corporation.

JSW Energy has been awarded the operation and maintenance (O&M) contract of the 100 mw captive power plant for JSW Steel. The O&M contracts for the 130 mw captive power plant at JSW Steel and the 2X30 mw plant at Siscol being executed by JSW Steel would also be entrusted to JSW Energy.

Earlier, Sajjan Jindal had said the power project in West Bengal would have a capacity for 1,000 mw, which could go up to 2,000 mw. The project was estimated to cost Rs 4,000 crore.

JSW Energy was formed in 1994, as a joint venture between the Jindal group and Tractebel SA of Belgium. The name was Jindal Tractebel Power Company.

When Tractebel sold its shares in 2001 to ICICI, IDBI and the Jindal group, it consequently came to be owned fully by the Jindal group, reports Business Standard.

Shriram Properties mulls Rs 900-cr IPO plan

Shriram Properties, the Rs 450-crore Bangalore-based real estate arm of the Shriram Group, is planing to raise Rs 900 crore through an initial public offering (IPO) in the current financial year.

Prior to the issue, the company is looking to raise around Rs 350 crore through the private equity (PE) route and is understood to be in talks with global PE players such as Blackstone, Sun-Apollo and two more funds. Sun-Apollo is a joint venture between the US-based Apollo and the Khemka family.

A spokesperson for Shriram Properties confirmed the plans for PE funding and the IPO issue.

The decade-old firm currently has over 1,200 acres of land, predominantly in Bangalore and Chennai, and has been focussing primarily on residential projects.

The company, in the recent past, has also diversified into development of malls. In Bangalore, the company is undertaking five residential projects worth Rs 800 crore.

According to sources, the private equity funding is expected to come directly to the company and will not be routed into a project-specific special purpose vehicle (SPV). Shriram is hoping to wrap up the deal by next month.

In fact, Sun-Apollo is understood to have invested substantially into an SPV, which Shriram Properties created in 2006 for an integrated complex in Chennai, reports Business Standard.

Zylog Systems sets IPO price band at Rs 330-350/sh

The public issue of Zylog Systems will hit the primary markets on July 20. The company has fixed the price band of its initial public offering at Rs 330-350, said an official from Motilal Oswal, book running lead manager to the issue.

Zylog Systems will be issuing 36 lakh equity shares of face value Rs 10 each through 100% book building process.

At the lower price band, the company will mop up Rs 118 crore and at the cap price it will raise Rs 126 crore.

Zylog plans to utilise the proceeds for developing and expanding its business to set up two state-of-the-art offshore development centres, fund acquisition and strategic investments and to meet the increasing working.

Zylog Systems is a global services provider delivering technology-driven business solutions. It is a 100% export oriented unit, registered with the Software Technology Parks of India and provides technology services to client specific requirements, reports The Economic Times.

Friday, July 13, 2007

Omnitech InfoSolutions IPO price band at Rs 90-105

Omnitech InfoSolutions proposes to enter the capital markets on July 19, 2007 with a public issue aggregating Rs 35 crore in the price band of Rs 90 to Rs 105 per equity share of Rs 10 each, including reservation for employees aggregating to Rs 1.75 crore.

UTI Bank is the BRLM and India Infoline is the Co-BRLM for the issue. This issue is being made through a 100% book building process wherein upto 50% of the net issue shall be allotted on a proportionate basis to qualified institutional buyers (QIBs). The equity shares are proposed to be listed on BSE and NSE.

Omnitech InfoSolutions proposes to utilize the net proceeds of the issue to fund acquisitions and strategic investments and/or to alternatively set up new technology center; to set up overseas offices for business expansion; and to enhance existing facilities.

The company offers a wide range of IT services and products such as business availability services, business continuity services, systems integration solutions, framework solutions and products. In business availability services, it provides services such as infrastructure management, application management and software testing. In business continuity services, it provides services such as disaster recovery management and disaster recovery consulting and auditing.

The Company has received sanction from MIDC for allotment of 14,161 sq. mtrs of land at Rajiv Gandhi Infotech Park, Hinjawadi, Pune.

Omnitech has a large client base across the globe in different industry segments like BFSI (Banking, Financial Services & Insurance), Manufacturing, Utilities, Services, Government bodies, etc. Its clients include amongst others, prominent companies such as HDFC Standard Life Insurance Company Limited, CRISIL Limited, WorldSoft Technologies Inc., Ami Impex Co.Ltd. and Emond bvba

To achieve the growth, the company has adopted a business strategy to enhance offerings, to expand the client base through the acquisition of new clients and to penetrate into new markets such as USA and Canada, UK, Belgium and other European countries, Japan and GCC countries. The company has total income of Rs 77.80 crore and earned PAT of Rs 11.83 crore for the year ended March 31, 2007 as against total income of Rs 54.16 crore and PAT of Rs 7.53 crore for the year ended March 31, 2006.

Thursday, July 12, 2007

Kaveri Seed files DRHP, to raise Rs 100cr via IPO

Kaveri Seed Company, a Secunderabad-based seed processing and selling firm, has filed a draft red herring prospectus (DRHP) with market regulator Sebi for its planned entry into the capital market early September to raise approximately Rs 100 crore.

The issue proceeds would be utilized to meet the working capital requirement and setting up new plants like corn cob drying plant in Andhra Pradesh, Bio Technology lab in Gundla Pochampally near Hyderabad and seed processing plant in Hyderabad. Apart from that the company is also planning to upgrade existing seed processing facilities in Karnataka and Andhra Pradesh.

"We are focussing small and medium farmers who own not more than 3 acres of land as they are in dire need to raise yield. Hence, we help them achieve 10-15% more yield than their usual output," C Mithun, director, Kaveri Seed Company, said.

We are planning to enter into north market with similar objective, Mithun added.

The company presently sells to customers in Karnataka, Tamil Nadu, Maharashtra and Andhra Pradesh and is now planning to enter Bihar, Madhya Pradesh, Gujarat, Uttar Pradesh, Punjab, Haryana and Rajasthan.

Drought-prone Rajasthan is our major focus for corn, sorghum, bajra and sunflower seeds while we are introducing cotton, too, in other states, Sharad Deshpande, GM, Kaveri Seed Company, said.

The company obtained licence to sell Monsanto seeds this year.

Corn would account for the majority of the company's seed sales especially in states like Bihar, UP and MP for which it is in the process of setting up a corn cob drying plant with the aim of improving germination, vigour and viability of the seeds. This would result in improved quality and quantity of the yield, reports Business Standard.

Uma Precision IPO soon

Precision engineering solution provider Uma Precision is in an expansion mode and is entering the capital market later this month with an initial public offering, IPO of 40 lakh equity shares, including the one lakh reserved for employees, to part finance five new projects.

The Pune-based manufacturer of precision assemblies, systems and machined parts for auto and electrical industries expects to mop up Rs 91 crore through the issue. This will partly fund setting up a facility at Uttarakhand to manufacture auto components, a cold forging plant at Waluj, Aurangabad, a foray into backward and forward integration and a plan to acquire 45 CNC machines at Supa.

Elaborating on forthcoming projects, Mr Rajendra Kankaria, Managing Director and CEO, said that UPL had invested Rs 10 crore in the Uttarkhand plant to make components for Tata Motors and Bajaj Auto. The plant will go on stream in December.

Coating plants

The company has also signed a licensee agreement with Doerken MKS Systems GmbH & Co KG for setting up two Delta Surface coating plants at Koregaon Bhima and Bangalore. The environmentally-friendly coating, and even manufacturing the required component could be a new business, Mr Kankaria said adding, “Our long term focus is job coating.”

Uma Precision has seven manufacturing plants at Pune, Aurangabad, Hosur, Ahmednagar and Bangalore. It manufactures 1,400 components, 70 per cent of which are for use in the auto industry. Its clients include the Kuwait-based Al Alia, Holden in Australia, and TM, BAL, Piaggio and Cararro in India. The compnay had a turnover of Rs 123 crore during the 06-07 fiscal, including Rs 14 crore through exports, and a net profit of Rs 7 crore, reports The Hindu Business Line.

Sebi relaxes IPO norms for core PSUs

The government will find it easier to raise money for a range of infrastructure projects. Capital market regulator Sebi has relaxed some of the initial public offering (IPO) norms for government-owned companies, statutory authorities or corporations and even special purpose vehicles (SPVs) engaged in infrastructure.

In a communique issued to registered merchant bankers and stock exchanges on Tuesday, Sebi has said that the new changes shall be applicable to all draft offer documents on which observations are issued by the regulator on or after the date of the circular. NHPC, Power Grid Corporation and Oil India are among the state-owned organisations considering IPO plans. The key changes made by Sebi are :

Lower Face value

Public sector infrastructure entities will have the flexibility to issue IPOs with face value of share less than Rs 10. At present this can be done only by companies having fixed the IPO issue price above Rs 500. So, a government company where shares were initially issued at less than Rs 10, will not have to restructure its capital before going for an IPO where issue price is less than Rs 500.

Promoters’ Contribution

Currently, promoters have to maintain at least 20% in the post-IPO share capital of a company. If shares have been issued to the promoter at less than the issue price within one year prior to the issue, then such shares are not counted in calculating the 20% holding. These shares can be factored in only if the promoter chips in the balance before the IPO. This rule will not hold for government owned infrastructure companies.

No Lock-in

Today, if promoters are issued shares in an unlisted company, they cannot sell the shares to the public before one year. However, an SPV formed by the government or any of its entities can offer the shares for sale along with the IPO of the SPV in less than one year. An easy exit may encourage institutions and financial investors to join the government as co-promoters in infrastructure ventures.

Less Public Holding

The public shareholding in government controlled infrastructure companies can now go below even 10%. Under the present rules, the public shareholding in most companies (except banking and infrastructure) has to be a minimum 25%. It can be even 10% for companies which have issued 60% shares to qualified institutional buyers such as banks, mutual funds, FIIs etc.

The relaxations will not only enable many public sector infrastructure entities to tap the market with minimum dilution, but will also give the government more elbowroom to structure SPVs which can quickly mop up funds. In making the changes, Sebi has amended the Sebi (Disclosure & Investor Protection ) Guidelines 2000. The regulator has given a detailed list of sectors that qualify as 'infrastructure' in its website, reports The Economic Times.

Everonn IPO oversubscribed 132 times

Everonn Systems, a fully integrated education and learning Solutions Company, has received an overwhelming response for their initial public offering and the issue has been oversubscribed 131.47 times at the upper end of the price band of Rs 140. Non institutional and retail investors have given strong support to the issue followed by qualified institutional investors.

A 40 lakh public issue received bids for 52.58 crore shares, which includes bids for 16.69 crore shares at cut off price.

Huge response has seen from non-institutional investors (HNIs). The reserved portion of 6 lakh shares received bids for 16.66 crore shares, that is 227.81 times. Retail and qualified institutional investors also on the same line, their portion subscribed 124 times and 93 times, respectively.


The company had entered capital market for subscription with a public issue of equity shares of face value of Rs 10 each, for cash at a premium aggregating to Rs 50 crore at the price band of Rs 125-140, per equity share. The issue was being made through a 100% book building process.

Everonn Systems, a fully integrated Knowledge Management, Education and Training Company offers a range of services which includes creating educational and training content, designing and executing learning initiatives and setting up the required infrastructure for learning and training.

The equity shares of the company are proposed to be listed on Bombay Stock Exchange and the National Stock Exchange. The book running lead manager to the issue is Centrum Capital and registrar to the issue is Cameo Corporate Services Limited.

Everonn Systems has embarked on expansion project to be funded by IPO proceeds and internal accruals. Everonn Systems has budgeted an outlay of Rs 3000 lakh for IT Infrastructure Services. The company plans to expand their operations close to 1000 schools every year. The company will allocate Rs 1725 lakh from their IPO proceeds towards capital expenditure for Virtual and Tech Enabled Learning Solutions. Company would also utilize the funds raised from the IPO towards brand building; funding for proposed mergers & acquisitions and to invest in the proposed subsidiary.

Gammon Infra scales down its equity stake offer for IPO

Gammon Infrastructure Projects (GIPL), a subsidiary of Gammon India and a listed construction company, has revised its proposed equity stake offer downwards to 10 per cent from the 20 per cent earlier considered by the company in a draft prospectus for an initial public offering (IPO).

It said GIPL would also issue FCCBs worth another 10 per cent. The move comes after an interim order by the Securities Appellate Tribunal, directing the Securities Exchange Board of India (SEBI) to process GIPL’s draft red herring prospectus expeditiously. On March 23, 2007, SAT had admitted the appeal of GIPL and had passed the interim order. The GIPL appealed against SEBI’s order of December 21, 2006.

Shareholding

The market regulator had banned Gammon India, GIPL and the promoters from accessing capital market after the SEBI had concluded that one of them had allegedly used the company funds to increase his shareholding in the company.

GIPL two years ago had shed 12.5 per cent of its stake in favour of Ochziff, a US registered fund. The SEBI had also banned Reliance Silicones (RSL), reportedly owned by Mr Ajitabh Bachchan, from the capital market for a year for helping the specific promoter in alleged routing Gammon funds to his private companies to subscribe to a company’s rights issue in 2001.

Rights Issue

The SEBI whole time member, Mr G. Anantharaman, in his order had said: “The whole sequence in the arrangement smacks of a make belief to disguise part funding of the rights issue as a business transaction.”

The regulator had discovered that Gammon India gave RSL Rs 50 lakh, which it transferred to two newly opened bank accounts of Devyani Estate and Properties and Nikhita Estate Developers, firms owned by one of promoter family members. “The whole scheme of transactions was crafted to enable the promoter associated entities of Gammon to subscribe to its rights issue using company funds,” the SEBI had concluded, reports The Hindu Business Line.

Sunday, July 08, 2007

Omaxe sets IPO price band at Rs 265-310/sh

Omaxe, a real estate player, has fixed its initial public offering (IPO) price band at Rs 256-310 per share.

Omaxe, which has a presence in 30 cities and nine states, intends to deploy proceeds worth Rs 500 crore for payments related to land, Rs 236 crore towards repayment of loan and Rs 699 crore for meeting development and construction costs of some of its projects.

The company has a land bank of over 3,000 acre and at present 47 projects are under development.

The issue would constitute 11.20 per cent of the fully diluted post-issue paid-up capital of the company, if the green shoe option is exercised and 10.30 per cent, if the option is not exercised.

Of the total equity float, up to 1.75 crore equity shares are for the public, while the balance 2.96 lakh shares are reserved for eligible employees of the company. Additionally, there would be a green shoe option of 17.5 lakh equity shares.

Omaxe has appointed DSP Merrill Lynch Ltd, Citigroup Global Markets India and UBS Securities India as global coordinators and joint book running lead managers for the issue. JM Morgan Stanley is the book running lead manager.

AppLabs may float IPO to raise nearly $ 40mn

In a bid to provide an exit option to venture capitalist (VC) investor Sequoia Captial and raise funds to fuel inorganic growth plans, the world’s largest independent software testing company, AppLabs, is preparing to go public in a few months.

“It is possible we will float an IPO on the Indian bourses to raise roughly USD 40 million within the next 12 months,” Sashi Reddi, AppLabs Founder- CEO, said on Thursday.

There is also an option of looking at private equity (PE) funding to finance our expansion plans, including acquisitions over the next few months, Reddi said while announcing the rebranding of the company.

Sequoia Captial had invested USD 17 million in the company three years back. The rebranding of the company is a consequence of the USD 37 million acquisition of IS Integration that AppLabs carried out in September last year, catapulting it to the largest third party software testing company in the world.

AppLabs had also acquired a small testing company, KeyLabs, earlier in April 2005. The global software testing market is estimated at a whopping USD 54 billion in 2007 and projected to grow to USD 63 billion by 2010.

However, most of this is carried out in-house by software developers with third-party service providers occupying a minor, though a growing, part of the market.

AppLabs posted revenues of UDS 70 million last year, most of it from 120-odd customers in the US and 100 plus in the UK.

“However, we are now actively expanding into Europe, growing on our relationship with large customers like Capgemini,” Adam Ripley, senior vice-president, marketing, said, adding there were at least 50 active leads currently being pursued in countries like France, Germany etc.

The new branding was required, given the fact that AppLabs was now targeting new markets and had increased its offerings of new verticals, he said.

Meanwhile, a new testing facility, with a seating capacity of over 1,000 people, is slated to open in October this year in Hyderabad.

This apart, the company will also open its first testing facility in the UK soon. This will be the first in a series of labs AppLabs will set up in the UK and Europe over the next 12 months, Reddi said, reports DNA Money.

Tuesday, July 03, 2007

Religare Enterprises files draft papers for IPO

Financial services firm Religare Enterprises has filed draft papers with Securities Exchange Board of India (Sebi) for an initial public offer. Religare will offer up to 11.36 million shares of Rs 10 face value through a book-built issue.

Religare also said it may issue up to 3.78 million equity shares in a pre-IPO placement.