Blue Star Info to divest 25% to strategic partner

Blue Star Infotech, the Rs 120 crore software product engineering services firm and part of the Rs 2,000 group Blue Star Group, is looking to divest 20-25 per cent to a strategic partner.

The company which has taken a hit on its profits owing to the recent Rupee appreciation against the US Dollar has had discussions with three players and is expected to finalise the partner next fiscal.

Suneel M Advani, vice chairman & MD, Blue Star said, "We are looking for a strategic partner who can get us customers. We have enough cash in the group to fund its growth and will not divest for financial reasons. Various discussions are on to divest the stake." Close to 55 per cent of the company is held by promoters.

Blue Star Infotech, in addition to product engineering services, offers enterprise services and travel & hospitality-focussed IT services besides independent testing services. Headquartered in Mumbai, the company has seven software development centres in Mumbai and Bangalore and employs 1,200 professionals.

The company for the third quarter recorded consolidated sales revenue of Rs 33.5 crore for the quarter-ended December 31, 2007, posting a growth of 27 per cent, while its profit took a beating owing to rupee appreciation.

Commenting on the performance, Advani had said, "While we continue to achieve a quarter-on-quarter revenue growth, our profitability remains a concern due to the performance of the rupee against the dollar. We initiated strong, focused measures within the organisation to offset this. These measures continue to be in effect and will be enforced stringently. With the recent appointments of industry veterans to bring in the relevant expertise and focus on our primary business lines, we expect to see an acceleration in our new business acquisition momentum."