Tech Mahindra fixes price band for IPO

Tech Mahindra has fixed a price band of Rs 315 to Rs 365 a share for its initial public offer, which will hit the market on August 1.

The company, a Mahindra and Mahindra-British Telecom venture, would issue 127.46 lakh equity shares of Rs 10 each, consisting of a fresh issue of 3,186,480 equity shares and offer for sale of 9,559,520 equity shares by M&M and British Telecommunications Plc.

Of the issue, 11.58 lakh equity shares will be reserved for employees. The issue, which will open on August 1 and close on August 4, constitutes 11 per cent of the post issue paid-up capital.

The net issue would constitute 10 per cent of the post issue capital of the company. The company is expecting to raise about Rs 400 crore in the lower band and Rs 465 crore in the upper band. The funds raised would be used to set up additional facilities in Pune to enhance its delivery infrastructure.

The IPO will be through a 100 per cent book building process with an allocation of at least 60 per cent of the issue size allocated to qualified institutional buyers (QIBs). Of these 5 per cent shall be allocated to mutual funds, 10 per cent to non-institutional investors and up to 30 per cent would be available for allocation to retail bidders.

Tech Mahindra, president for corporate affairs Sujit Bashi said, "We will use the proceeds from the fresh issue for creating facilities for expansion on our 25 acre campus at Hinjewadi in Pune. The Pune campus will have a capacity for about 9,000 people."