Tech Mahindra files draft prospectus

Tech Mahindra, an IT solutions provider for telecom industry, has filed a draft red herring prospectus (RHP) with the Securities and Exchange Board of India (Sebi) for its proposed initial public offering (IPO).

The company, which was formerly known as Mahindra British Telecom (MBT), is planning to offload 1.27 crore shares, or 11 per cent of its total shares to the public.

Of the total 1.27 crore shares, 11.5 lakh shares will be reserved for employees. Mahindra & Mahindra (M&M) and British Telecom (BT) will offer 38.2 lakh and 57.3 lakh shares as part of the issue.

The company will issue additional equity of 31.8 lakh shares as part of the issue, vice-chairman, managing director and CEO Vineet Nayyar told reporters here today.

"Our listing is the next step in our journey of evolution, assisting in our facility expansion plans to keep pace with our business needs," he added.

However, neither the date of the IPO nor the amount it proposes to raise from the market were divulged.

Post IPO, M&M's stake will fall to 45.01 per cent from 51.12 per cent and BT's stake will fall to 33.95 per cent from 38.56 per cent, while the company's stake will reduce to 8.57 per cent from the present 8.81 per cent and other shareholders stake will slashed to 1.47 per cent (1.51 per cent at present). The company has a total of 11.26 crore equity shares.

Tech Mahindra intends to use the proceeds from the issue for creating facilities for expansion.

The company has acquired 98,400 square metre of land at the Rajiv Gandhi Infotech Park in Hinjewadi, Pune, and proposes to build a world class facility.