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IBS Software looks at Nasdaq listing

Vinson Kurian

THIRUVANANTHAPURAM, Dec. 5

IBS Software Services, a joint venture between the Technopark-based International Business Services (IBS) Group and Atraxis AG of Switzerland, the wholly-owned IT arm of SAirGroup specialising in software solutions for the air transportation industry, is aiming for a Nasdaq listing by next year.

The size of the float has not been finalised which, according to Mr V.K. Mathews, Chairman and Managing Director, is just as well, since raising resources is least among the company priorities.

He told Business Line that he sets great store by the IPO inasmuch as it would help generate a renewed sense of accountability and commitment which ``will stand the company in good stead''. Another motivating factor is the need for designing an attractiv e employee stock option plan (ESOP).

The company is confident of generating the resources internally for financing the immediate expansion plans, which call for an investment of $10 million (around Rs 45 crore) for setting up a second production centre in Ernakulam.

The 10-floor, one-lakh sq.ft facility is coming up fast over prime property and is expected to be commissioned by the end of next year.

The Ernakulam operations will, however, be launched beforehand from out of a rented facility in the city. After Ernakulam, IBS Software Services plans to set up a third facility in Kozhikode.

In the run-up to the IPO, the company has begun a comprehensive image/brand building exercise in the print media.

Tipped to run for an year, the campaign is being executed by HTA.

The campaign is structured in such a way that the company will not be seen focussing on the air transportation sector alone.

Future diversification plans include forays into the banking and finance verticals.

The company expects to set in motion the pre-IPO formalities, including the necessary filings and the roadshows, early next year and hopes to complete the same in the first six months. A consultant will also be roped in for the purpose.

The company has become Kerala's largest software exporter with the 1999-2000 earnings aggregating around Rs 18 crore.

The projected turnover for the current financial year is Rs 70 crore which is expected to touch Rs 100 crore by 2002.

The recently set-up US operations began with two large contracts.

The first is a tie-up with Societe International Telecommunication Association (SITA) for an airline fares distribution venture.

Valued at Rs 5 crores initially, the deal is expected to generate repeat orders in quick succession.

The second project with another US-based company is worth $4 million, but Mr Mathews refused to reveal further details.

Software development and export will be handled entirely by the joint venture regardless of the business verticals that the group ventures into.

IBS Software Services is waiting for the domestic market to ``mature a little more'', before planning a suitable marketing strategy, Mr Mathews said.