The much-awaited initial public offering( IPO) of Citigroup affiliate IT company, i-flex solutions is set to hit the market on June 5. The company would be offering 39,61,700 equity shares of a face value of Rs 5 each with the floor price fixed at Rs 530 per share.
The fresh issue of shares would be to the extent of 33,60,000 shares, while the balance portion of 6,01,700 shares will be made up from an offer of sale from its existing shareholders.
As a result, the total equity capital of the company after the issue will increase from Rs 16.97 crore to Rs 18.65 crore.
The company will be adopting the book building route for the entire issue which would ensure an efficient method of price discovery, Rajesh Hukku, chairman and managing director, i-flex solutions said at a press conference in Mumbai today.
The company will be able to garner a minimum of Rs 178 crore if the issue is subscribed to at the floor price.
However, analysts pointed out that the company had drawn its investment plans expecting a much higher realisation from the IPO.
The company is planning to use Rs 170.61 crore out of the IPO proceeds to set up new development centres in Bangalore and Mumbai while Rs 50 crore would be used for global marketing efforts, said Hukku. That brings the total investments on the anvil at over Rs 220 crore.
The company would also be looking at acquisitions in India and abroad and the funds would come either from the IPO proceeds or from internal accruals.
i-flex would be looking at acquiring companies in niche areas such as fund transfer software and other such areas to complement its existing strengths in banking software.
On the delay in the IPO, Hukku said that it was to the extent of a quarter of a year and that the delay was more due to logistical reasons rather than any attempt at trying to time the market.
J M Morgan Stanley is the lead manager to the issue while DSP Merrill Lynch, Salomon Smith Barney India and Kotak Mahindra are the co-book running lead managers.
The shares are proposed to be listed on the National and the Bombay Stock Exchanges.
