Intellect Design Arena plans rights issue

Intellect Design Arena Ltd, which was earlier part of Polaris, is planning to raise funds through rights issue. The company has got shareholders approval to raise up to Rs 300 crore as equity.

The proposed fund raising is to support company's investment of around Rs 500 crore over the next few quarters. The investment will also be supported by selling some of the surplus lands, through debt and equity.

S Swaminathan, chief financial officer of the company said that the Board has given the nod for the rights issue.

The terms and conditions of the Rights Issue including the timing of issue, quantum of offer, issue price, rights entitlement ratio, record date, and other matters shall be decided in consultation with the Lead Manager to the rights issue.

While declined to give the quantum of offer, which the company is planning to raise, he said, the company has got shareholders approval to raise up to Rs 300 crore.

He said, the company needs to invest around Rs 100 crore on product development every year and another Rs 100-150 crore would be towards working capital and infrastructure development. He added the company expects to grow by around 18-22% in the next 12 months.

The company expects to turn profitable after the fourth quarter. While Swaminathan declined to commit the time frame, he said to turn profitable the company needs to make additional just $1 million in topline. Intellect reported negative Rs 9.85 crore EBITDA during second quarter.

Intellect Design Arena's revenues for the quarter ended September 30, 2016, stood at Rs 231 crore as against Rs 206 crore in the previous quarter representing 12% q-o-q growth in rupee terms. In Constant Currency terms, dollar revenue stood at $35.2 million as against $30.74 million in last quarter, representing 14.7% sequential growth.

In y-o-y terms, revenues stood at Rs 231 crore as against Rs 207 crore in the same period last year representing 11.5% y-o-y growth in rupee terms. In Constant Currency terms, dollar revenue stood at $35.83 million as against $31.94 million in the same period last year, representing 12% y-o-y growth.

Arun Jain, Chairman and Managing Director, Intellect Design Arena Limited said that during the second quarter the company has won three large transformation deals including one from Europe. The investments that the company has had given company's Products a Digital edge.