The Hindu Business Line : Four Soft IPO opens on Feb 16 — Issue priced at Rs 20 premium; to fetch Rs 20 cr

Mr Palem Srikanth Reddy (left), MD, Four Soft Ltd, with Mr Koh Boon Hwee, Chairman, Singapore Airlines, at a press conference held in Mumbai on Monday. - - Paul Noronha

Mumbai , Feb. 9

FOUR Soft Ltd, a Hyderabad-based software company, is launching an IPO of 79.5 lakh shares of Rs 5 each, at premium of Rs 20, aggregating Rs 19.875 crore.

Post-issue, the equity share capital of the company would grow to Rs 15.86 crore from Rs 11.89 crore currently.

The issue proceeds will be used to beef up the company's international marketing, fund inorganic growth initiatives, expand facilities and to meet product development and R&D expenses.

The IPO opens for subscription on February 16 and closes on February 23. The shares will be listed on NSE and BSE.

Mr Palem Srikanth Reddy, Managing Director, said that this was a good time to enter the market, especially from a lead manager's point of view. "However, if a company has a good product, any time would be suitable to tap the market."

UTI Securities is the lead manager to the issue, and Centrum Finance Ltd the co-lead manager.

Four Soft is engaged in developing Web-centric enterprise-wide solutions for the supply chain services industry.

Mr Reddy said that the business model employed allowed for a rapid scale-up and provision of solutions to various players in the supply chain process management.

The company had two products, based on J2EE technology, with 10 customers spread across the world.

It is targeting a small share of a $2.5-billion market for such enterprise-wide supply chain management solutions.

Mr Reddy added that the company had consistently written off expenses on product development, avoiding a carry-forward at any time.

UTI, under its India Technology Venture Unit Scheme, and APIDC Venture Capital Fund together hold 18.46 per cent stake in the company, which will drop to 13.83 per cent post-IPO. Post-issue, the public stake would be 25.06 per cent.

The company recorded a net profit of Rs 5.63 crore in the nine months ended December 2003 on an operating revenue of Rs 10.43 crore.