Press Trust of India / New Delhi Nov 08, 2009, 14:47 IST
Intrasoft Technologies, which runs greetings card website 123greetings.com, will enter the capital market to raise funds and has filed draft papers with market regulator Securities and Exchange Board of India (Sebi).
The company plans to hit the primary market with 37 lakh equity shares, which will constitute 25.12 per cent of the post paid up capital of the firm, according to the draft red herring prospectus (DRHP) filed with the Sebi.
According to the draft papers, Intrasoft Technologies (ITL) will use the proceed from the initial public offer (IPO) for different purposes, which includes branding and promotion, investment in technology infrastructure, purchasing a corporate office in Kolkata and general corporate purposes.
The firm needs Rs 20.15 crore for branding and promotion, Rs 13 crore for purchasing a corporate office and Rs 2 crore for investment in technology infrastructure.
The firm's website offers a range of electronic greeting cards, including multimedia content designed for catering to varying geographical and religious celebrations, occasions and other events.
The equity shares offered through the issue are proposed to be listed on the National Stock Exchange and the Bombay Stock Exchange.
Collins Stewart Inga and Anand Rathi Advisors are lead book managers of the issue.
The company already has a large enough office in Kolkata and which is half empty. It has been learnt that the company has cut down its employee strength by 70% in the last 2 years.
Even if the company needs a bigger office they can take it on rent. The company already has sufficient funds to do the technology upgrade. Instead of diluting their capital they can easily avail debt loan. And if trends on Alexa, ComScore and other similar sites are to be believed the company is losing out in competition and the promoters do not have much faith in the venture and looking for an exit.
I would not recommend this IPO for the public.
Regards,
Anand
Content Guide
