Citi Lifts 19.9% Newgen Stake

Citibank Venture Capital Fund has picked up a 19.9 per cent stake in Newgen Software Technologies, the only company in the country engaged in the development of document imaging solutions.

Newgen managing director, Diwakar Nigam, said : "The deal works out to the advantage of both the partners. The infusion of funds will help us finance the setting up of a subsidiary company in the US. For Citibank, it is a strategic investment, since we have been working closely in the area of document imaging for the past few years."

He, however, declined to comment on the amount at which the deal was struck. The remaining stake in the company is with the two promoters, Diwakar Nigam and his business partner. The equity base of Newgen is around Rs 3 crore. Nigam pointed out the promoters would like to offload a portion of their stake within the next two years to the public when they plan to launch their products internationally in a big way.

For the moment though, the two promoters are not keen to sell off any further equity shares. Newgen started in 1992 and last year recorded a turnover of Rs 12.5 crore. It has licensed its software product to the Japanese major Canon.

The company has launched Newgen Gold Reports, a comprehensive software that converts passive information contained in paper reports into an active on-line database resource, which is flexible, searchable and analysable. Newgen Gold Reports, based on the computer output to laser disc (COLD) and data subsetting technology, will thus help organisations to reduce the huge pile of data compiled on papers, Nigam said.

Worldwide the COLD and Data subsetting products have been widely used in banks, telecom companies and public utility organisations.

The new software package enables the customers to have direct access to archived report pages besides making available search facility on user defined indexes.

Newgen is looking at a marketshare of 25 to 30 per cent in the first year itself. The price of the package has been fixed at Rs one lakh.