Firstsource to raise Rs 400cr to fund acquisitions, expansion

New Delhi, Jan 25 (UNI) BPO firm Firstsource Solutions Ltd will raise about Rs 400 crore through an initial public offering (IPO) to fund its acquisition and expansion plans.

''The money will be invested to enhance our position in the BPO industry and widen our service offerings through strategic acquisitions in existing or new industry sectors, setting up the new facilities,'' Firstsource Managing Director (Europe) Matthew Vallance told reporters here.

The company this month acquired BPM Inc, a Delaware-based healthcare claims outsourcing firm in the US and will utilise part of the money raised through the IPO to finance acquisition of companies within the country as well as abroad, he said.

The take over of BPM was the second acquisition of a US company by Firstsource, which had in September 2004 acquired Account Solutions Group, LLC (ASG).

The issue will comprise of 69.30 million equity shares of Rs 10 each at a premium to be decided through a 100 per cent book-building process.

The price band of the public offering which opens on January 30 has been fixed between Rs 54 and Rs 64 per share. The IPO will close on February 2.

Presently, the company has 20 delivery centres, of which 11 are in India, six in the US, two in the UK and one in Argentina employing over 10,717 employees.

''We intend to set up new facilites in India to support the increase in business from existing and new clients... A centre is under development in Philippines,'' Mr Vallance said.

The company will set up a facility in Chennai and also intends to set up additional facilities in other parts of the country which is expected to be operational by the end of fiscal 2008.

The issue comprises a fresh issue of 6,00,00,000 equity shares by the company and an offer for sale of 93,00,000 equity shares by the ICICI Group, including a reservation for certain eligible employees of up to 12,00,000 equity shares of Rs 10 each.

The issue will constitute 16.65 per cent of the fully diluted post issue equity share capital of the company.

Atleast, 4,08,60,000 equity shares will be allotted on a proportionate basis to Qualified institutional Buyers (QIBs).

Further, 68,10,000 shares will be available for allocation on a proportionate basis to non-institutional bidders and 2,04,30,000 shares will be available for allocation on a proportionate basis to retail bidders, subject to valid bids being received at or above the issue price.

Firstsource will be listing its shares on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

UNI