Carlyle to invest in Allsec Technologies; may hold 35-40 per cent equity

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.