CTE plans Rs 24cr initial public offer

Cambridge Technology Enterprises (CTE) Limited, a Hyderabad-based IT service provider, will be going for a Rs 24-crore initial public offering. The company is raising funds to finance its Rs 30.7-crore investment plans.

"We have filed a draft prospectus with the Securities and Exchange Board of India (Sebi) for a public issue worth Rs 24 crore. Centrum Capital will be the lead manager for the issue," CTE director Krish Nangegadda told mediapersons.

CTE earned revenues of Rs 18.66 crore from January 2005 to March 2006. It focuses on application development and maintenance for business transformation, and has 78 employees in India and 14 in the US.

"We have planned an investment of Rs 30.7 crore for acquisitions, to build our competency centre in service-oriented architecture and to meet our working capital needs. While Rs 24 crore will be raised via the public issue, the UTI Bank has granted a term loan of Rs 4.7 crore. Further, Rs 2 crore has been funded by CellExchange Inc," Y Ramesh Reddy, chief financial officer of CTE, said.

CellExchange Inc, which typically provides transformational solutions for the Federal government, earlier owned 88 per cent stake in CTE. It later divested its entire stake in the company. With the infusion of Rs 2 crore, it now has close to 10 per cent stake in CTE.

As of today, promoters hold around 74 per cent stake in CTE while around 16 per cent is with the employees in the form of stock options. The public will be offered 25-30 per cent stake in the company.

Meanwhile, CTE is also planning to expand its market reach. "We will make investments in the west coast of the US," Nangegadda said. Nangegadda is also the president of CellExchange Inc.