Chennai-based Allsec Technologies, which became the first voice-based BPO company to be listed on the Indian bourses with its Rs 50 crore IPO in 2005, has received a non-binding investment proposal from leading private equity firm Carlyle to pick up a 20 per cent stake. The proposal is for a preferential issue of over 30 lakh equity shares at a price of Rs 260 per share aggregating Rs 78.56 crore.

The company had announced its first quarter results earlier this week, with its net profit marginally higher at Rs 6.78 crore from Rs 6.31 crore quarter-on-quarter (QoQ). Its net sales increased to Rs 27.6 crore from Rs 25.9 crore QoQ and its operating profit margin is at 27.6 per cent versus 28.2 per cent QoQ.

In an earlier interview Adi Saravanan, founder and president of Allsec Technologies, had explained that the addition of over 900 heads in Q1, which had strained its margins during the quarter, would show results in the coming quarters. Allsec is now targeting higher growth than the industry growth of 45 per cent.

Saravanan expects to raise Rs 102 crore from Carlyle's offer. He also states that Carlyle may hold 35-40 per cent post open offer with its promoters holding a 31-per cent stake. CNBC-TV18 shares with domain-b excerpts of its exclusive interview with Saravanan:

Could you confirm whether you had indeed had discussions with Carlyle and if the investment is 20 per cent, would it necessitate an open offer as well?
Let me clarify that we are not an IT service company, but we are more a BPO-call center company, based out of Chennai. We just confirmed that Carlyle had indicated an interest to make an investment of 20 per cent in our company. Definitely, this will trigger an open offer.

So this will not be a sale from promoters, it will be a fresh issue of equity. Have you made up your mind to make that placement to them?
Yes, we have made up our mind to make the placement to them. We are raising this money essentially for making some strategic acquisitions. We are looking at various opportunities both within India and abroad. That is the basic intent.

The promoters are not offering any equity in the open offer and we are just diluting. All the money will come to the company. Promoters are also subscribing to the warrants for up to 5 per cent of the company at the same price, which Carlyle is making an investment at.

How much money are you expecting to get from Carlyle and is this up to 20 per cent or could it be a little lower than that?
As far as the issue from the company is concerned, it will be 20 per cent. We are not sure how much of the equity will come in the open offer. The company will raise about Rs 78.85 crore.

Once the promoters subscribe to the warrants, we will have additional Rs 24 crore. So the total fund raising, because of this exercise, including the exercise of warrants will be about Rs 102 crore.

How much are you issuing to Carlyle as equity and how much as warrants?
It is 20 per cent full equity and 1 per cent as warrants.

They may end up getting 40 per cent of your equity, how would that sit in terms of shareholding then, between you, the large investors and promoters?
Promoters would hold about 31 per cent, that is Jagdish and I would hold around 31 per cent. Probably Carlyle will end up holding 35 or 40 per cent, one doesn't know. However Carlyle's fund has shown good incentives for us to run the company. For the next four years, we are pretty much on the win side for the company and we will be part of the management team running the company.