I-Flex Ipo Floor Price At Rs 530 A Share

The much awaited initial public offering (IPO) of Citigroup affiliate information technology company i-flex Solutions is set to hit the capital market on June 5, 2002. The company will be offering 39,61,700 equity shares of face value Rs 5 each, with the floor price fixed at Rs 530 per share.

The fresh issue will be to the extent of 33,60,000 shares, while the balance 6,01,700 will be made up from an offer of sale from its existing shareholders. As a result, the total equity capital of the company after the issue will increase from the current level of Rs 16.97 crore to Rs 18.65 crore.

 

The firm will be adopting the book-building route for the entire issue, which would ensure efficiency in price discovery, Rajesh Hukku, chairman and managing director of i-flex Solutions, said at a press conference today.

The company will be able to garner a minimum of Rs 178 crore if the issue is subscribed to at the floor price. However analysts pointed out that the company had drawn its investment plans expecting a higher realisation from the IPO. i-flex was planning to use Rs 170.61 crore from the IPO proceeds to set up development centres in Bangalore and Mumbai, while Rs 50 crore would be used for global marketing efforts, said Hukku. This brings the total investments on the anvil to over Rs 220 crore.

The company will also be looking at acquisitions in India and abroad. The funds will come either from the IPO proceeds or from internal accruals. i-flex will be looking to acquire firms in niche areas such as fund-transfer software, to complement its existing strength in banking software.

On the delay in launching the IPO, Hukku said it was to the extent of a quarter of a year. It was more due to logistical reasons rather than any attempt to time the market, he added.

J M Morgan Stanley is the lead manager to the issue while DSP Merrill Lynch, Salomon Smith Barney, India and Kotak Mahindra are the co-book running lead managers.

The shares are proposed to be listed on the National Stock Exchange and the Bombay Stock Exchange.