Datamatics Tech files prospectus

Datamatics Technologies filed a draft Red Herring prospectus for an initial public offering (IPO) of 1.03 crore equity shares with the Securities and Exchange Board of India.

The shares with a face value of Rs 5 each will be issued at a price to be decided through a book building. Sources close to the development said the company was seeking to raise between Rs 100 crore and Rs 150 crore through this IPO.

Lalit Kanodia, chairman, Datamatics Technologies said, "The proceeds from the IPO are proposed to be utilised for investments in subsidiaries and associates, strategic initiatives and potential acquisitions." The company is in talks with two UK-based and one US-based companies for acquisitions.

The IPO will dilute 25.39 per cent of the fully paid-up equity capital of the company, reducing the promoters' stake to around 69 per cent from the existing 94 per cent.

The stake of venture capital funds will also decline by a percent to stand at 3 per cent, while the employees' stake will go up to 2 per cent from the existing 1 per cent. The public issue is expected to hit the markets in mid-March, subject to regulatory approvals.

The company has appointed Enam Financial Consultants as the book running lead managers and IL&FS Investsmart as co-book running lead managers. The company has also mandated Ernst & Young as its international advisors.

Manish Modi, managing director & CEO, said, "The company has two wholly owned subsidiaries - one in Germany and one in the US. It has acquired two US-based companies - Saztec International and CorPay Solutions. This has given us the experience and expertise in successfully integrating acquired companies."

The company posted a total income of Rs 60.43 crore for the year ended March 2003, while total income stood at Rs 72.73 crore for the nine months ended December 2003. Net profits for the same period were Rs 15.53 crore and Rs 21.43 crore, respectively.