Northgate to raise Rs 450 cr through GDRs

Northgate Technologies, a Hyderabad-based technology and internet telephony services provider, will raise up to Rs 450 crore through the issue of global depository receipts (GDRs).

Addressing the media after the company's annual general meeting (AGM) here on Wednesday, Venkat Meenavalli, chairman and managing director, said the GDR issue, including a greenshoe option, would be listed on the Luxemburg Stock Exchange within the next two to three months.

"Around 70 per cent of the funds thus raised would be utilised as capital expenditure for building world-class server farms, especially in Hong Kong as more and more Chinese companies are approaching us to host their solutions," he added.

At present, the company has 320 servers in London and around 50 in Hong Kong.

The AGM also approved an issue of bonus shares in a ratio of 1:1 and a 40 per cent equity dividend. "Currently, the company's paid-up equity share capital stands at around Rs 16 crore, which will increase to Rs 32 crore post-bonus issue. Post-GDR, it will touch Rs 40 crore," the company's chief financial officer, Anil Kumar, said.

Stating that Axill, an online advertising exchange, contributed nearly 85 per cent to the company's net revenues that stood at Rs 118 crore during the first quarter of the current financial year, he said its patent-pending voiceover internet protocol (VoIP)-powered TV Globe7 accounted for 15 per cent.

"Globe7 hardware devices' contribution for the quarter was relatively less as it was launched recently. We, however, expect this division to contribute around $15 million this fiscal, and the net profit to grow around 70 per cent with major contributions from China," he added.