Infotech Enterprises Ltd, a 100 per cent export oriented software unit, is floating a public issue with a unique safety net option provided by the lead manager Industrial Development Bank of India (IDBI).
The public issue of 23.25 lakh equity shares of Rs 10 each for cash at a premium of Rs 10 per share aggregates Rs 465 lakhs, out of which 2 lakh shares (aggregating Rs 40 lakhs) are reserved on firm allotment to non residents and overseas corporate bodies.
The safety net option which includes a buy-back at a premium to issue price (see table) and guaranteed return for the first 15 months from the date of allotment (April 1997) to original investors. The longer the investor holds the share within the 15 month period the higher is the premium commanded over the issue price. The lowest premium over the issue price is 20 paise and the highest is Rs 3.50.
Investors wishing to sell up to 300 shares will have to tender the transfer forms duly stamped and signed in favour of the IDBI. IDBI would in turn arrange for payment for all valid requests in through a cheque/draft which would be sent by post within 10 days from the consolidation date.
Mohan Reddy, managing director of Infotech Enterprises, said that the safety-net scheme was designed keeping in mind the present market conditions to protect the interest of the small investors. The duration of 15 months would provide allottes an opportunity to evaluate the companys performance and prospects for one full year and then decide on the exercise of the option.
The capital is being raised to fund the companys expansion plans which includes setting up of new plant and machinery, and a new technology park in Madapur on the outskirts of Hyderabad.
The companys net profits were Rs 10.9 lakh in 1995-96 and stood at Rs 99 lakh for the first six months of the current financial year. Infotech currently employs 300 persons.
