Accel Frontline in talks with Indian, US Cos

New Delhi, Sep 25: Chennai based IT services provider Accel Frontline Ltd, today said it is in ''active discussions'' for acquisitions with two Indian companies in the Banking and BPO space, and a few US companies as part of its domestic and global expansion plans.

''We are talking to 5-6 Indian companies for expansion of our software services through acquisitions and are in active discussions with two of these offering banking and BPO services. We are also keen to tap the US market and are talking to a few companies there who have a strong client base in India,'' Accel Frontline Chairman and CEO NR Panicker told reporters here after announcing the IPO issue.

He added that formal announcements of the above will be made early next year.

The company, who's core focus areas are IT infrastructure management services which contributes 30 per cent of the total service turnover, software and Business Process Outsourcing (BPO), is aggresively looking at expanding both domestically and globally, besides improving and growing its Enterprise Service Solutions (ESS) and BPO infrastructure.

In order to fund these expansion plans and acquire and invest in strategic businesses, the company today announced it will enter the capital market on September 28, 2006, with an IPO of 5.6 million equity shares of Rs 10 each through a 100 per cent book-building process.

''We are planning to raise Rs 59 crore through this IPO issue, of which Rs 30 crore will be for global business expansion and strategic acquisitions, Rs 20 crore will be for working capital and other corporate expenses, while Rs 9 crore will take care of expansion of software and BPO services,'' Mr Panicker said.

The issue which closes on October 5, 2006, is in the price band of Rs 75 to Rs 90.

The issue would constitute 25.04 per cent of the fully diluted post issue paid-up capital of the company.

SBI Capital Markets Ltd is the Book Running Lead Manager, while Bajaj Capital Ltd is the co-BRLM for the issue. The Intime Spectrum Registry Ltd is the registrar.

The company has two software development centres in Chennai and Kochi with a capacity of 600 people and 100 people respectively, and it is growing at a rate of 30 per cent at present, Mr Panicker said.

Accel Frontline Ltd specialises in consulting, infrastructure, applications, outsourcing and support services.

The company's total income for the year ended March 31, 2006 was at Rs 170.4 crore while its net profit was Rs 9.7 crore, as against a total income of Rs 136.8 crore and profit of Rs 4.2 crore last year.

UNI