Polaris To Raise $50 M To Fund Acquisitions

Polaris Software Lab Ltd has drawn up plans to raise $50 million to fund acquisitions, develop infrastructure and for expansion.

Arun Jain, chairman and managing director, Polaris, said, "We will be looking to raise the funds through a GDR/preferential allotment/strategic placement."

Jain ruled out an American depository receipts (ADR) float this time saying the company will opt for this route to raise resources only in September 2001.

Polaris has already identified three US-based software companies of varying sizes and strength for acquisition and negotiations are currently on. Jain, however, refused to divulge any further details on the acquisitions.

The process of raising funds and completing the acquisition is likely to be through in four months, Jain said.

 

The company's expansion plan include the setting up of another software development centre close to the existing one located some 20 km from the city.

A software development centre in Hyderabad is also on the cards.

Commenting on the trend of declining valuations of technology stocks worldwide, Jain said the "reality check" was necessary as some IT companies were overrated by the market. "The correction is necessary to differentiate the men from the boys," he said.

For 2000-2001, Polaris is projecting a turnover of Rs 250 crore, representing a topline growth of 70 per cent.

The company ended fiscal 1999-2000 with a turnover of Rs 160.29 crore, up by 165 per cent from the previous year.

"For the last six years we have been growing at over 100 per cent. We are now looking at a more realistic growth of 70 per cent by consolidating our operations," Jain said.