Mascot Ipo Fixed Portion Oversubscribed

The fixed price portion of the initial public offering (IPO) of Mascot Systems Ltd (MSL), one of the ten 100 per cent subsidiaries of US-based iGATE Capital Corporation, was oversubscribed nearly four times. The issue closed on May 4.

The fixed-price portion comprised 7.5 lakh equity shares of Rs 4 each at a price of Rs 480 per share. The book-built portion which comprised 2.25 million equity shares, was oversubscribed 10 times

with excellent response from a cross-section of investors including foreign institutional investors, mutual funds, banks, corporates and individuals. The whole issue was oversubscribed eight-and-a-half times.

"In a bullish market, nothing less than 10 times oversubscription would have been satisfactory, but given the present state of the market, the response was not bad," a senior official of Kotak Mahindra Capital Company, lead manager to the issue, said.

The Rs 230 crore MSL is a leading provider of solutions in the e-business, business intelligence, custom solutions, application maintenance outsourcing and application re-engineering areas. The company has a strong presence in Canada, Japan, Germany, Singapore, UK, US and the Netherlands.

In India, the company has off-shore development centres in Bangalore, Chennai and Pune. MSL's customers include General Electric, Daimler Chrysler Services AG, Electrolux and Circuit City Stores.

Last year, MSL's registered a turnover of Rs 230.16 crore, and a net profit of Rs 24.37 crore. In the present year, the company is targeting a turnover of Rs 325 crore and a net profit of Rs 50 crore.

K S Ananthanarayan, chief financial officer, MSL, said earlier, "The company decided to launch the IPO because it plans to give stock option to its employees, without which it is difficult to retain talented employees."

Through the IPO, MSL is divesting 10 per cent equity stake. The company intends to divest another 10 per cent through employees' stock option (ESOP).

"The company intends to expand its capacity with the money raised from the capital market. The funds will also be used to make strategic acquisition of companies with strong customer bases," Ananthanarayan added.

Earlier, Ananthanarayan had said, MSL is in dialogue with a company producing WAP applications for acquisition. "Talks are at an advanced stage, and till it is closed I would not like to give out more details," Ananthanarayan said.