Sasken IPO price band fixed at Rs 230-Rs 260

Issue to open on August 11

Sasken Communication Technologies, has fixed a price band between Rs 230 and Rs 260 per share for its 100 per cent book-built initial public offering, the Bangalore-based software firm said in a statement on Tuesday. The issue will open on August 11.

The company is making a public issue of 50 lakh equity shares of Rs 10 each for cash through a book building process. Of this, the company has reserved five lakh shares for allotment to its staff.

Of the balance, "at least 60 per cent" will go to qualified institutional buyers on a discretionary basis. Another 10 per cent has been reserved for non-institutional investors and the rest is open to retail investors. Sasken has appointed Enam Financial Consultants as the sole book running lead manager, it said.

The company hopes to raise Rs 115 crore at the lower end of the price band and Rs 130 crore at the upper end of the price band. The net offer to public will constitute 16.36 per cent of the fully diluted post issue paid up equity capital of the firm.

For the year to December 2004, Sasken earned profits after taxes of Rs 12.4 crore on total income of Rs 167 crore, Neeta Revankar, the company's chief financial officer said earlier this year. The company's net worth as on March 31, 2004 was Rs 113.75 crore.

The revenues were split 85:15 between services and products. Sasken provides embedded R&D outsourcing services, including contract R&D, testing and certification of hardware and software that go into various telecom gear. Rajiv C Modi, Sasken's chairman and chief executive officer had said earlier this year, the near term aim will be to boost margins on the revenue fronts.

Sasken, which has several strategic equity investors, will do this by targetting more tier-I customers and increasing royalty per unit shipped in the case of mobile phones and DSL modems, he said.

On the products front, which is presently losing money, Sasken sells "protocol stacks" that go into mobile phone handsets and reference designs for digital subscriber link modems. "The 'stacks' are the bridge between the phone's user interface and its hardware," G Venkatesh, the company's chief technology officer said.

Some two million modems had been shipped with Sasken's products in them and 20 different mobile phone handsets had its protocol stacks in them, Venkatesh said.

Among Sasken's equity investors are Finnish cellphone maker, Nokia's venture fund for late stage startups, Nokia Growth Partners, and Canadian telecom equipment maker, Nortel Networks. Chip maker Intel provided early funding for Sasken, through its venture fund Intel Capital.