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Tech Mahindra plans IPO to fund expansion news
22 June 2006
Mumbai: Tech Mahindra, the software arm of auto major Mahindra & Mahindra, has filed a draft red herring prospectus with market regulator Sebi for an initial public offer (IPO) of 12.74 million shares.

The company, a joint venture between Mahindra & Mahindra and BT Group plc, said the IPO will fund the expansion of its infrastructure, which will include the setting up of a campus in Pune involving an investment of Rs350 crore.

The company is also setting up a state-of-the-art software development centre and integrated campus in Kolkata. The centre - Tech Mahindra Technology Centre East - will employ about 2,000 people in the first phase. The campus, to be built on a 12-acre plot, will also have a residential complex nearby.

The new centre will be the Tech Mahindra''s centre of excellence for LHS solutions and will handle system integration projects for core telecom areas.

Post IPO, the Mahindra group holding in the JV would come down to 45.01 per cent from the current 51.12 per cent while BT holding would drop from 35.56 per cent to 33.95 per cent, the company said.

Mahindra and BT together would divest a total of 9.55 million shares while the company would issue 3.81 million fresh shares through the IPO.

Over the years, BT holding in Tech Mahindra has come down from 80 per cent to below 40 per cent currently.

Tech Mahindra, which provides telecom solutions to companies the world over, is among the top ten IT services companies in the country in terms of export revenues. The company reported a 31 per cent rise in 2005-06 revenues, at Rs 1,242.7 crore, against the previous year''s Rs. 945.6 crore. Profit after tax (PBT) grew by 130 per cent, from Rs. 102.4 crore to Rs 235.4 crore over the same period.

 

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Tech Mahindra plans IPO to fund expansion