The enterprise applications company to take QIP, FCCB, GDR and ADR routes.
GSS America Infotech, a Hyderabad-based enterprise applications integration and infrastructure management services (IMS) company, is planning to raise up to $75 million (approximately Rs 350 crore) through qualified institutional placement (QIP), foreign currency convertible bonds (FCCB), and global and American depositary receipts to fuel its inorganic growth plans.
“We have identified some companies of different sizes which make strategic sense and can help increase our depth in the same line of business. The process of raising funds and utilising them for acquisitions will be completed in a span of one year,” Bhargav Marepally, chief executive officer and managing director of GSS, told Business Standard.
The 11-year-old company, which went public in February 2008, had a little over Rs 100 crore cash reserves, including a portion of the initial public offer proceeds and internal resources, on its books on June 2009. “We want to keep that powder dry for our organic growth,” he added.
The company had so far acquired three entities — Infospectrum Consulting in 2006, System Dynamix Corporation in 2008 and ATEC Group in 2009. Its stock closed at Rs 302.30 on the Bombay Stock Exchange on Thursday, up 1.07 per cent over the previous close of 299.10. According to N Siva Kumar, senior vice-president (operations and global delivery) of GSS, the company is looking at replicating the virtualisation storage capabilities that came into its fold through acquisition of ATEC in Indian and West Asian markets.
“Our exposure to the Indian market is less than single-digit as we always used it for delivery and didn’t see it as a marketplace. We will be setting up three centres of excellence, one each for virtualisation, software-as-a-service-based applications and cloud computing, with an employee strength of 100 people, which will be operational from September 2010,” he said.
“The spend by all electricity boards and other bodies in India is estimated at Rs 20,000 crore in three years. However, when you look at IMS providers, there are large players like HCL Technologies and Wipro and after that there is a huge vacuum. This is the space which we want to target,” Kumar said, adding the company was conservatively looking at $20 million (Rs 92.5 crore) revenues from the Indian market in the next financial year.
GSS America, which has 944 employees, including 220 working out of Hyderabad, gets 90 per cent of its revenues from the US. The company has projected $100 million revenues ( around Rs 460 crore) in FY11 as against $80 million (370 crore) last fiscal.
