MUMBAI: Vishal Information Technologies, a small size ITES company, plans to raise around $40 million through global depository receipts (GDR), to be listed on Luxemburg Stock Exchange.
The amount so raised would be utilized to acquire foreign companies and dollar financing would suit most for this purpose since it would avoid any impact of current currency market volatility.
The acquisition would be entirely financed by the net proceeds from the GDR issue and no further debt would be raised for this purpose.
The company has already identified a couple of target companies, which operate in data conversion and fund accounting space.
Vishal Information Technologies’ business also includes data conversion and content management. And the current acquisition plan would be in line with the existing business of the company.
The company will issue six new Indian equity shares for every GDR issued outside. If the current issue goes as per plan, the company’s paid-up equity capital would increase to around Rs 15 crore from the existing Rs 10.68 crore.
The company had an annual turnover of Rs 40 crore in FY ’08 with an operating margin of around 35%. It reported 50% year-on-year growth both in sales and net profit in recent quarters.
Currently, the company’s stock is trading at a very high price-earning multiple of around 36 compared to the valuations of other small sized IT players. The stock lost nearly 7% at the end of Tuesday’s session compared to 0.5% rise in Sensex.
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