The Hindu Business Line : Persistent Systems IPO likely by December

Outsourced software product developer Persistent Systems Ltd (PSL) is trying for a listing through an initial public offering by the third week of December, and is awaiting approval for the draft red herring prospectus filed with the Securities and Exchange Board of India on October 12.

The IPO comprises a public issue of 4,974,836 equity shares with a face value of Rs 10 each, including a reservation of up to 400,892 equity shares for eligible employees, through a 100 per cent book building process. The price bandwidth will be determined by the book runners at a date closer to the issue, Mr Anand Deshpande, Chairman and Managing Director, PSL, disclosed, adding that if the issue did not happen in early December, the company would look at late January.

The public issue will constitute 12.48 per cent of the fully diluted post-issue paid-up capital of the company. It will fund new office premises at Hinjewadi and Nagpur that will both become operational by March 2009, to the extent of Rs 109 crore and Rs 42.5 crore respectively, investment in hardware and software (Rs 9 crore) and general corporate expenditure. A pre-IPO placement of up to 219,279 equity shares to some institutional investors is also being considered.

Set up in 1990, PSL was the first to be established in the Software Technology Park in Pune, and the first to export software from the STP scheme in India. Headquartered in Pune with offices in Hyderabad, Goa and Bangalore, it currently employs over 3,700 people including 3,000 software engineers. The US accounts for 92 per cent of its total revenue, which was Rs 314.4 crore for the year ended March 07. The net profit during the same fiscal was Rs 55.5 crore.