Infotech firm MphasiS-BFL is yet to finalise the deal to raise around $20 million through private placement with foreign and domestic investors owing to depressed market conditions. Talks are, however, still on.
The company, which had announced its fund-raising plan in October last year, was planning to offer around 7-12 per cent stake to raise funds. It was planning to utilise the proceeds for its growth plans in India and some strategic investments.
According to a company spokesperson, "The company is still in talks with potential investors for its private placement. It would be premature to confirm any other details at this stage."
A top merchant banking source associated with the proposed private placement said the company's efforts to privately place shares had evoked good response from foreign and domestic equity funds. But because off the US slowdown and the prevailing dismal market conditions, investors are not willing to commit funds at a huge premium.
The reason for planning to raise funds via private placement was its delay in mobilising money through an American depository receipts issue. MphasiS BFL had recently said that it was putting the proposed $100-million overseas float on hold.
The Bangalore-based company had given the exclusive mandate to BNP Paribas to identify strategic investors, including foreign private equity funds, mutual funds and foreign institutional investors.
Bearing International Equity Fund and MphasiS Holding have equity stakes of 39 per cent and 32 per cent respectively in MphasiS BFL, while the holding of foreign institutional investors and domestic institutions is about 17 per cent. The balance is mainly held by the public.
The MphasiS BFL scrip was up 3.3 per cent on Friday on the Bombay Stock Exchange (BSE). It closed at Rs 218 against a 52-week high of Rs 645.
MphasiS BFL has more than 1,450 software developers and 11 development centres worldwide. The company plans to concentrate on the three verticals of finance, logistics and transportation.
