The Citigroup-promoted financial software company i-flex solutions is targeting to raise about Rs 225 crore through its initial public offer (IPO) for which the book-building process started on June 5.
"The response to the issue which opened yesterday has been good. The bids were mostly received in the range of Rs 530-600," the company's senior vice-president N R K Raman said here today. i-flex had announced a floor price of Rs 530 for its IPO last week.
Even though the issue price will be known only after June 11 when the book-building process closes, as per the initial estimates of one of the co-book running lead managers, the IPO size would be of about Rs 225 crore, with the total offer size of around 39 lakh shares, he said.
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The book running lead manager is J M Morgan Stanley, while the co-book running lead managers are Kotak Mahindra Capital, Salomon Smith Barney and DSP Merril Lynch. The company in January had privately placed two per cent stake with standard chartered bank at a share price of Rs 650.
i-flex is offering 3,961,700 equity shares comprising fresh issue of Rs 3,360,000 shares and an offer for sale of 601,700 lakh shares of Rs five face value each for offloading 10 per cent stake. Post-IPO, the total equity of the company will increase to Rs 18.65 crore from Rs 16.97 crore.
"The company also has a reserve of about Rs 228 crore which would be utilised for acquisition purpose," Raman said adding that "even if we have a huge reserve, the purpose of going to the market is more visibility and better branding."
Sixty per cent of the proposed issue would be reserved for financial institutions and foreign institutional investors, 15 per cent for non-institutional investors like high networth individuals and the remaining 25 per cent will be for retail investors. The company plans to list the shares on the National Stock Exchange and the Bombay Stock Exchange.
It has planned to invest about Rs 220 crore this year to set up new development centres and fund its initiatives in increasing global marketing presence. i-flex, which has eight development centres in the country, would invest about Rs 170 crore for setting up two new centres in Bangalore and Mumbai.
Besides, the company would make an investment of about Rs 50 crore to fund initiatives in increasing global marketing presence. The investments would be made from net proceeds of the initial public offer.
Following completion of the issue, shareholding of the promoter and principal shareholder Orbitech Ltd in the company would come down from current 47.5 per cent to 43.2 per cent.