Vishal Information Technologies IPO opens for subscription

Vishal Information Technologies, a company in the field of ITES/BPO services and a subsidiary of Tutis Information Technologies will open for subscription today with a public issue of 27,90,000 Equity shares of Rs 10 each through 100% book building process. The Issue consists of fresh Issue of 17,90,000 Equity shares and an offer for sale of 10,00,000 Equity shares by "Selling shareholders’’. The price band has been fixed at Rs 140 to Rs 150 per equity share of Rs 10 each. The issue closes on 24th July 2008. The Issue will constitute 26.12% of the fully diluted Equity share capital of the Company. Credit Analysis and Research (CARE) has assigned "IPO Grade 3’’ to the Issue. The Equity shares are proposed to be listed on BSE and NSE. Keynote Corporate Services and IDBI Capital Market Services are the BRLMs for the Issue.

IDBI Capital Market Services has invested an amount of Rs 3.72 crores in the equity Share capital of the company by subscribing to 3,10,000 Equity shares of Rs 10 each at Rs 120 per Equity share. Vishal proposes to utilize the net proceeds of the Issue to part finance the cost of the proposed expansion of the facilities in Chennai and the cost of setting up of Quality Assurance Center and Marketing office in Mumbai. The expansion includes increasing Data digitalization seats from present 250 to 450, E-publishing seats from 150 to 250 and Digital Library seats from 75 to 100.  The issue proceeds would also be utilized for setting up of subsidiaries in UK and USA.

Presently the Company operates from leased facilities in Chennai and Mumbai with approximately 475 workstations. As part of the expansion plans, the Company intends to set up new facilities to support the increase in business from existing and new clients. It proposes to buy an office space of approximately 15,000 sq. ft. at Special Economic Zone (SEZ) in Chennai.

Majority of the Company’s business is predominantly sourced from the United Kingdom and United States of America through tenders floated by the various government authorities, educational institutes, etc. Presently it does not have any presence in the UK and USA which many a times acts as hindrance for getting the work allotted. It feels that its offshore presence in the form of a subsidiary company would enable Vishal’s participation in the bidding process more active and fruitful. The various other marketing activities for Vishal would also be carried out from these subsidiaries.