The Hindu Business Line : Tech Mahindra IPO price band fixed at Rs 315-365

PUBLIC ANNOUNCEMENT: Mr Anand Mahindra, Chairman, Tech Mahindra at a press conference to announce the company's IPO in Mumbai on Wednesday. - Paul Noronha

Mumbai , July 26

Tech Mahindra's IPO shares will be priced between Rs 315 and Rs 365 a share. The offer will open on August 1 and close on August 4.

The company plans to raise up to Rs 465 crore through the issue, which offers 12.75 crore shares for sale.

The company had reached critical mass and it had decided that the time was right for the offer, said Mr Anand Mahindra, Chairman, at a news conference on Wednesday, referring to the timing of the offer in the current market conditions.

The net issue will constitute 10 per cent of the post-issue capital. The company is a joint venture between M&M and British Telecom, with over 60 per cent of its business coming from the British Telecom Group.

British Telecom currently owns 33 per cent in the joint venture.

The offer consists of a fresh issue of 31.86 lakh shares and a sale by M&M and British Telecom of 95.59 lakh equity shares, of which 11.58 lakh shares will be reserved for Tech Mahindra employees.

The offer will be made through 100 per cent book building process. The allocation for qualified institutional buyers is 60 per cent of the issue size on a proportional basis, with five per cent being reserved for mutual funds.

Up to 10 per cent of the issue is available for allocation to retail bidders on a proportionate basis. It will use the proceeds from the issue for creating facilities for expansion at Hinjewadi in Pune.Later, facilities will be set up in Hyderabad, Kolkata and Chandigarh, said Mr Vineet Nayyar, Vice-Chairman & Managing Director.

"The IPO is also aimed at enhancing our brand name and providing liquidity to our existing shareholders including our employees who hold equity shares," he added.

Tech Mahindra said that its revenues grew 31 per cent to Rs 1,242 crore during the year ended March 31, 2006.

The book running lead managers to the issue are Kotak Mahindra Capital Company and ABN AMRO Securities.