Date:22/06/2006 URL: http://www.thehindubusinessline.com/2006/06/22/stories/2006062204301500.htm

Back Tech Mahindra files draft prospectus for IPO

Our Bureau

Proceeds of the issue to be used for funding expansion

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IPO PLANS: Mr Vineet Nayyar, Vice-Chairman & Managing Director and CEO, Tech Mahindra, at a press conference announcing the company's IPO plans in Mumbai on Wednesday. — Shashi Ashiwal

Mumbai , June 21

Tech Mahindra, a joint venture between Mahindra & Mahindra and British Telecommunications Plc (BT), said it would make an offer of 1.2 crore shares in its initial public offering.

The company has filed its draft red herring prospectus with SEBI on Wednesday. The issue would account for 11 per cent of the diluted equity capital of the company.

The IPO will be combination of dilution of stake by the two joint venture partners as well as fresh issue.

Mahindra & Mahindra and BT will offer 38.2 lakh shares and 57.3 lakh shares respectively.

As part of the issue, the company will issue additional equity of 31.8 lakh shares.

Dilution of stake

Post issue, M&M's stake will fall to 45.01 per cent from 51.12 per cent, BT's holding will dip to 33.95 per cent from 38.56 per centOf the proposed 1.2 crore-share issue, 11.5 lakh shares will be reserved for employees.

The proceeds of the issue would go towards funding the company's expansion plans. The company proposes to spend most of the money on the Rajiv Gandhi Infotech Park in Hinjewadi, Pune.

Mr Vineet Nayyar, Vice-Chairman and Managing Director, said: "Our listing is the next step in our journey of evolution, assisting in our facility expansion plans to keep pace with our business needs."

Asked about the timing of the IPO, he said, "We are on a much sounder footing than we were two years ago and we feel we have various characteristics that make our company attractive to the public."

"Tech Mahindra has emerged as one of the leading players in the Telecom Software space, due to a combination of technological capability, a committed workforce and strategic partnerships with industry leaders.

"One of India's Top 10 software exporting companies, it has now set its sight on the new markets and customers and the listing is a strategic step in this direction," the company said in a news release quoting its Chairman, Mr Anand Mahindra. Kotak Mahindra Capital Company and ABN Amro (Securities) India Ltd are the lead bankers for the issue.