Shonkh Plans Rs 45cr Placement
City-based Shonkh Technologies has decided to postpone its Rs 100 crore initial public offering (IPO) by two months and is all set to raise around Rs 45 crore through the private placement route.
C V R Rao, chief financial officer, Shonkh Technologies, said the company was planning to place about 16 lakh shares privately and is in talks with funds such as SUN FC, GE Capital, SBI Mutual, Morgan Stanley Asset Management, and Jardine Fleming. The private placement should, according to Rao, be over within the next two weeks. The 16 lakh shares, for private placement, will be priced at around Rs 400 per share and represents about 4 per cent of the total equity of the company.
Shonkh, which recently bagged an order worth over Rs 400 crore from the Gujarat government for issue of optical cards for the road transport sector (eRTO project), will use the funds generated by the IPO and the private placement for working capital needs of about Rs 70 crore, acquisition costs of about Rs 36 crore, IPO expenses of about Rs 10 crore, and Rs 8 crore towards opening of development centres.
Another Rs 5 crore will be set aside for research and development, while about Rs 36 crore will be used for developing the infrastructure. The company has also gone in for a term loan of Rs 16 crore from the Global Trust Bank. This is to cover total fund requirements of Rs 161 crore.
The IPO is slated to hit the markets in the next two months and the company is looking at attracting a price band of Rs 400-450, via the book building route. A total of 20 lakh shares will be available to the public. The issue of 20 lakh shares to the public represents about 10 per cent of the total equity of the company.
Shonkh has been forced to postpone its IPO because of the crash in the stock markets brought about by the selling position that the foreign institutional investors (FIIs) had taken over the past weeks, Rao said.
The company has placed privately about 12 per cent of its equity already with institutions such as UTI, and the UTI-India Growth Fund. Additionally, Ketan Parekh had picked up an 18 per cent stake in Shonkh. The company had issued shares to these three parties at a price of Rs 130 per share and had mopped up funds totalling Rs 42 crore in an earlier round of funding this year.