Mastek to raise Rs 150 cr for expansion in insurance

Mumbai-based IT company Mastek proposes to raise close to Rs 150 crore ($30 million) through the issue of overseas convertible bonds, external commercial borrowings or any other securities. The announcement is subject to approval from shareholders.

The company plans to use the funds for acquisitions and expansion of existing subsidiaries. The company is looking for acquisitions in the insurance space and in companies that are addressing the government vertical.

"We want to close at least 2-3 deals before the end of this financial year. The deal size could be in the range of $10-30 million (around Rs 40-120 crore) and the companies are from the US and Europe," said R S Desikan, CFO and director (finance), Mastek. He further added, "The acquisition in the insurance space is clearly to plug in some gaps. We have identified some companies with the right product and skills and we are also in talks with some of them."

Desikan also feels that in the US markets there is no national players catering to the government segment and hence makes a good case for acquiring small firms, which work closely with regional government bodies. Mastek wants to acquire such firms which will provide them skill and access to the huge e-governance market in the US.

While the company wants to increase its revenue shares from these two regions, it is also keenly looking for specific state government led projects in the domestic market. For FY07, the company's revenues were Rs 810 crore ($184 mn). It has close to 3,400 employees and has presence in the UK, Japan, South East Asia and the US.