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Tuesday, Oct 28, 2003

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MphasiS moving closer to overseas listing

Abhrajit Gangopadhyay

Bangalore , Oct. 27

THE MphasiS group has revisited its overseas listing plan following good business visibility, strengthening confidence in technology sector across global markets and near-term robust growth prospects, according to company sources.

The proposed issue could be in American Depository Shares (ADS) and the exercise could commence within six months.

"We could list in 6-18 months, though nothing is concrete as yet," they added. The issue size could be anywhere between $50 million and $100 million.

In the earnings call for the quarter ended September, the Chairman, Mr Jerry Rao, had said that ADS listing was "a desirable thing" though there was no definite timeline to that proposal even as the board had said "let's keep talking about it".

MphasiS had planned an overseas float during the tech boom in 2000-01 but shelved it following the global meltdown in technology stocks.

"We believe that the company has been toying with this plan for quite sometime... the current environment seems conducive for such float," an analyst with a European brokerage firm said.

"The trigger story of MsourcE as well as long client relationship with big names like Federal Express would help the company woo overseas investors," he added.

However, he cautioned that Barings could perhaps exit through the overseas float.

i-flex Solutions has already drawn up its overseas float plan and the issue is seen to boost foreign investors' sentiment towards Indian software to great extent. The success of that issue would also help MphasiS, analysts said.

The MphasiS stock has lost close to 25 per cent in the current calendar. But, following robust second quarter earnings growth, several foreign brokerages have retained and/or upgraded their recommendations to "buy".

ABN Amro Securities has revised its target price upwards to Rs 575 from Rs 515. CLSA has maintained "buy" rating as its top mid-cap pick.

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