I-Flex Solutions Defers Float By 3 Months

The initial public offer (IPO) of i-flex Solutions Ltd, the Citigroup-promoted financial software company, will be delayed by three months.

The company, which had initially planned the IPO by the end of the current fiscal, has now written to the shareholders to seek their approval to extend the float by 90 days.

"We have told the shareholders about the extension that we want. As we think that the whole IPO process that we had started some time back requires more time," Deepak Ghaisas, chief executive i-flex Solutions, said today.

The company, in which Citigroup holds 48.5 per cent, is in the process of finalising the prospectus for the IPO. "We expect to file it with the regulatory authorities some time in March," he said.

The float will be a combination of a sale offer by the existing retail shareholders and a fresh issue of equity.

"The main objective of the issue is to provide liquidity to our existing shareholders, get currency for acquisitions and to enhance visibility," he said.

i-flex would offer around 10 percent of its enhanced equity (i.e. equity capital post the issue).

The public offer will total 10 per cent of the post-IPO capital, Ghaisas said. Fresh equity will amount to a minimum of 2.5 per cent of the post-IPO capital. The company has a paid-up equity capital of Rs 16.63 crore.

The issue is being lead-managed by JM Morgan Stanley, Kotak Mahindra Capital Company, Salomon Smith Barney India and DSP Merrill Lynch.

The public offer will total 10 per cent of the post-IPO capital. Fresh equity will amount to a minimum of 2.5 per cent of the post-IPO capital.

Other objectives of the IPO include improving visibility and aiding the company in future acquisitions. The capital raised from the proposed IPO will be used by the company to consolidate its position in established markets and make inroads into new markets.

i-flex recorded total revenues of Rs 321.1 crore for the financial year 2000-01, a growth of 56 per cent over the previous year. Earnings grew by 59 per cent over the previous year to Rs. 110 crore.

The company also has a cash reserve of Rs. 160 crore which it will utilise for acquisition, market expansion, technology development and brand building.