The Hindu Business Line : Firstsource IPO to open on Jan 29

TAPPING NEW SOURCE: Mr Ananda Mukerji, Managing Director & CEO, Firstsource Solutions Ltd, at a press conference to announce the company's IPO in Mumbai on Wednesday. - Paul Noronha

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Mumbai Jan. 24 Firstsource Solutions Ltd is entering the capital market with an initial public offering of 6.93 crore equity shares of Rs 10 each for cash at a premium to be decided through the 100 per cent book-building process.

Firstsource is a BPO company providing business process solutions in the banking & financial services, telecom & media and healthcare sectors.

The company intends to use the net proceeds of the issue to make acquisitions, set up new facilities and repay a loan.

The price band for the issue has been fixed between Rs 54 and Rs 64 per share and at the upper end, the issue size works out to Rs 443.52 crore.

The issue will constitute 16.65 per cent of the fully diluted post-issue equity share capital of the company.

At least 60 per cent of the net issue to the public shall be allotted on a proportionate basis to qualified institutional buyers (QIBs). Further, 10 per cent of the net issue shall be available for allocation on a proportionate basis to non-institutional bidders, while 30 per cent of the net issue to the public shall be available for allocation on a proportionate basis to retail bidders.

"Post the IPO, on a fully diluted basis ICICI Bank's stake in the company will come down to 23 per cent from 29 per cent," said Mr Rajesh Subramaniam, Chief Financial Officer.

The company intends to utilise Rs 180 crore of the net proceeds for acquisitions by March-end 2008, said Mr Ananda Mukerji, Managing Director and CEO. "Our growth strategy involves gaining new clients and expanding our service offerings, both organically and through strategic acquisitions, " said Mr Mukerji. The company intends setting up new delivery facilities in India by fiscal 2008. About Rs 45 crore of the net proceeds will be used to repay a portion of the loans taken from ICICI Bank.

The issue opens on January 29 and closes on February 2.

DSP Merrill Lynch Ltd and Deutsche Equities India Pvt Ltd are the joint book runners for the issue, while ICICI Securities is the co-book runner.