Tech Mahindra to come up with public issue

Mumbai, July 26: Information technology solutions provider Tech Mahindra today announced its decision to enter the capital markets on August one.

The company would make public issue of 12,746,000 equity shares of Rs 10 each, consisting of a fresh issue of 3,186,480 equity shares and an offer for sale of 9,559,520 equity shares by Mahindra and Mahindra Ltd and British Telecommunications Plc.

The equity shares numbering 1,158,790 of the issue will be reserved for eligible employees.

The issue will close on August 4.

Tech Mahindra Chairman Anand Mahindra told mediapersons here that, ''The company proposes to use the proceeds from the fresh issue for creating facilities for expansion.'' The company has been granted 98,923 sq metre land at Rajiv Gandhi Infotech Park in Hinjewadi, Pune for the purpose. The company has also planned to set up its bases at places like Kolkata, Hyderabad and Chandigarh, Mr Mahindra added.

The issue is being made through the cent per cent book building process with an allocation of at least 60 per cent of the issue size to qualified institutional buyers (QIB). Of the 60 per cent allocated to QIBs on a proportionate basis, five per cent shall be proportionately allocated to mutual funds. Further, up to 10 per cent of the issue would be available for allocation to non-institutional investors and up to 30 per cent of the issue would be available for allocation to retail bidders on a proportionate basis, he said.

The issue will consist of 11 per cent of the post issue paid up capital of the company and the net issue will constitute 10 per cent of the post issue capital. The price band for the issue is Rs 315 at lower end to Rs 365 at the higher end.

Company's Vice Chairman and MD Vineet Nayyar said, ''Our listing is the next step in our journey of evolution, assisting in our facility expansion plans to keep pace with our business needs.'' ''The IPO is also aimed enhancing our brand name and providing liquidity to our existing shareholders, including our employees who hold equity shares of the company,'' he added.

To a poser, he said the attrition rate of his company, which was 23-24 per cent until recent past, has come down to 17 per cent now.

UNI