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Citigroup buys 12.5% in Systems America

Our Bureau

MUMBAI, Sept. 6

CITIGROUP, US, has picked up a 12.5 per cent stake in Systems America (India), an e-business systems solutions provider, at a cost of Rs. 1.57 crores.

``The investment has been made through a preferential issue of 1 million shares at Rs. 157 per share by Systems America (India) directly to Citigroup's investment arm, Citicorp International Finance Corporation, Delaware, US,'' Mr. A. Tyagi, CEO, Systems America, said.

``These funds will be utilised mainly for acquisitions in e-business, wireless and third generation telecom areas as well as building core global infrastructure,'' he added.

Systems America is a consulting firm specialising in strategic enterprise wide systems integration and offers custom solutions, e-business solutions, business intelligence solutions and package implementation services.

The company is also considering an entry into the capital market with an initial public offering (IPO) in a couple of months.

``The IPO size would be around Rs. 40-55 crores and we will be looking at a book building offer,'' Mr. Tyagi said.

``Citigroup, however, has no plans to divest at the post-IPO level and intends to stay with Systems America for at least another five years,'' Mr. Ajay Relan, India Head, Citibank NA Private Equity, said. Post IPO dilution, Citigroup's stake would come d own to nine per cent, he added.

Speaking about the portal, Elabh.com. which Systems America had launched earlier this year, Mr. Tyagi said, ``The portal has grossed a total revenue of Rs. 2.5 crores and made 60 per cent profit so far. We have acquired 150,000 members and have made payo uts of Rs. 45 lakhs to users since the launch.''

The company, which has reported a total revenue of Rs. 30.8 crores for the year 1999-2000 with a net profit of Rs. 3.5 crores, expects to earn Rs. 67 crores as revenue next year with a profit of Rs. 13.5 crores.

Pic.: (From right) Mr.A.Tyagi, CEO, Systems America, Mr.Ajay Relan, India Head, Citibank NA Private Equity, and Mr.Vallabh Bahsali, Head of Enam Financials, at a press meet in Mumbai on Wednesday.