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Cyberspace roadshows for private placement

Our Bureau

MUMBAI, June 18

CYBERSPACE Infosys Ltd (CIL) has begun roadshows for its Rs. 140-crore private placement of shares to institutional investors. The offer price for the issue of 15 lakh shares is pegged at Rs. 930 per share, 22 per cent discount to the previous closing pr ice (on June 16) of Rs. 1,170. The issue price is slightly higher than the minimum price of Rs. 929.69 worked out as per the SEBI formula for private placements, arrangers to the issue said.

The issue, being arranged by SBI Capital Markets and UTI Securities, would open on June 26 and close on June 30. After the issue, the promoters' holdings would stand diluted to 34 per cent of the enhanced capital of Rs. 7.31 crores from the current 43 pe r cent in lower capital of Rs. 5.81 crores. Post-issue, institutional holdings would go up to 32 per cent from the current 11 per cent, including about 6 per cent held by Jardine Fleming.

The main objective of the issue is to fund acquisitions abroad to expand overseas growth as opposed to organic growth. ``Through these acquisitions, CIL plans to achieve global market penetration with access to blue chip customer base and short circuit t he time frame for growth,'' Mr. Sanjay Saxena, Director and Co-President, told Business Line.

CIL, a zero-debt company, has earmarked over Rs. 115 crores to fund four acquisitions abroad, two in the US and two in the UK. CIL has already shortlisted the target companies, which are predominantly owned by ethnic Indians, and is at advanced stages of completing the formalities, according to Mr. Saxena.

Post-acquisition, CIL would bring delivery capability, state-of-art infrastructure, high bandwidth management team and leverage of strategic partnerships while the target companies would bring together strong market penetration in overseas markets with c lients in the banking, finance and insurance sectors.

After the issue, CIL, which has recorded four-fold rise in year-on-year growth during the last three years, expects to see growth in revenue to Rs. 343.5 crores.

Of the funds to be raised, Rs. 12 crores would be used for infrastructure upgradation for domestic and overseas offices. The balance Rs. 12.5 crores is proposed to be used for working capital.